---
title: "AAGR"
description: "AAGR is the arithmetic annual growth rate: total return divided by years, without compounding — the reinvest-off counterpart to CAGR in Performance Metrics."
canonical_url: "https://fincanva.com/docs/analysis/aagr"
last_updated: "2026-07-24"
md_url: "https://fincanva.com/docs/analysis/aagr.md"
---

# AAGR

AAGR, the arithmetic annual growth rate, is a strategy's total return divided by the number of years in the backtest, with no compounding applied. It is the reinvest-off counterpart to [CAGR](/docs/analysis/cagr): the two share one row on the metrics view, and the **Reinvest profits** toggle decides which one is shown. Because AAGR ignores compounding, it usually reads higher than CAGR over multi-year gains.

**Also seen as:** arithmetic annual growth rate, simple annualised return, non-compounded annual return

## How is AAGR calculated?

AAGR spreads the whole-period return evenly across the years, as a simple average with no year-on-year compounding.

$$
\text{AAGR} = \frac{\text{total return}}{\text{years}}
$$

where: total return is the whole-period gain as a fraction, and years is the length of the backtest in calendar years.

## Defaults in Fincanva

- AAGR fills the annualised-return slot on the metrics view when **Reinvest profits** is off; with it on, the same slot shows CAGR.
- It is a plain arithmetic mean — the same total return over the same length always gives the same AAGR, regardless of the path taken to get there.
- It is expressed as a percentage and can be negative when a strategy loses money over the period.

## Worked example

Take the same run that grows 10,000 into 16,100 over 5 years — a total return of +61%. AAGR divides that evenly: 61% ÷ 5 = 12.2% per year. CAGR on the same run is about 10% per year. The gap — 12.2% versus 10% — is the effect of compounding: AAGR counts each year's gain against the original stake, while CAGR compounds it on the growing balance.

*An AAGR describes what a strategy would have done on historical data, not what it will do, and no annual growth rate is a rate you can expect to repeat. Fincanva provides no financial advice — see [Is this financial advice?](/docs/investing-theory/is-this-financial-advice).*