Point-to-point returns focus solely on the performance between two specific dates and should not be used to generalize overall returns. Rolling returns, however, offer a more comprehensive view.

Calculating rolling returns involves selecting the NAV on a specific date and comparing it with the NAV from the same date a certain number of years prior to gauge the returns between them.

By applying this method across all dates within a timeline, a time series of rolling returns is obtained. Determining the range of rolling returns involves identifying the highest and lowest values within this series. The average helps in understanding the expected return.

For mutual fund investments, evaluating historical rolling returns over the desired investment period is crucial for assessing potential returns and risks. For example, in equity funds, a minimum of 5 years of rolling return data, or more, is advisable.

Rolling returns provide critical insights, aiding investors in crafting better investment strategies.