Can someone please break down the difference between the two? What exactly do they calculate and not calculate?
I have a 14% per annum return difference when I switch between them in my Australian portfolio.
Essential it is this:
A simple annualised return simply divides the rate or return for the period by the number of years in the investment period.
A compound annual growth rate calculates the year on year growth rate that would be required to achieve the same result.