Rate of return on a portfolio
What is rate of return on a portfolio?
This is how much money you earn from your portfolio of investments. Calculating your rate of return allows you to measure how well you've invested your money.
Where have you heard about rate of return on a portfolio?
It's one of the most important figures you'll calculate as an investor. There are several methods for working it out, but your overall return has to be compared to the right benchmarks and the risk of your portfolio.
What you need to know about rate of return on a portfolio.
There are several ways to calculate the rate of return on your portfolio, including time-weighted and money-weighted returns. If you've made no contributions or withdrawals over the period, both these measures should produce identical figures. You can calculate your rate of return on a daily basis, or over a longer period such as a year. The main components that make up your rate of return are dividends and capital appreciation, which refers to the rise in value of an asset based on market price.
Find out more about rate of return on a portfolio.
Another important calculation is the expected return of a portfolio. Lean more about this here.