Investopedia

Continue to Site »

Cumulative Return

Filed Under » ,
Dictionary Says

Definition of 'Cumulative Return'

The aggregate amount that an investment has gained or lost over time, independent of the period of time involved. Presented as a percentage, the cumulative return is the raw mathematical return of the following calculation:

Cumulative Return
Investopedia Says

Investopedia explains 'Cumulative Return'

Investors are more likely to see a compound return than a cumulative return, as the compound return figure will be annualized. This helps investors to compare different investment choices.

A common way to present the "effect" of a mutual fund's performance over time is to show the cumulative return with a visual such as a mountain graph.

Investors should check to confirm whether interest and/or dividends are included in the cumulative return; such payouts may be assumed to be re-invested or simply counted as raw dollars when calculating the cumulative return. Any marketing material for a mutual fund or similar investment should state any assumptions clearly when presenting such performance data.

Articles Of Interest

  1.

    5 Ways To Measure Mutual Fund Risk

    These statistical measurements highlight how to mitigate risk and increase rewards.

  2. The Advantages Of Mutual Funds

    Learn how to get diversification, liquidity and professional management at an affordable price.

  3. Top 4 Reasons To Save For Retirement Now

    No more excuses. Make sure you are financially secure and independent for your golden years.

  4. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  5. 4 Behavioral Biases And How To Avoid Them

    Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio.

  6. Mutual Fund Ratings: Crucial or Insignificant?

    Mutual fund ratings can help investors, but they have their drawbacks as well.

  7. Multi-Asset Funds Or Your Own Mix?

    The underlying concept of mixed funds is very appealing. Discover if you're better off with professional management or creating a mixed fund of your own.

  8. 5 ETFs Flaws You Shouldn't Overlook

    Despite their popularity, exchange traded funds have some drawbacks that investors should know about.

  9. Using The Price-To-Book Ratio To Evaluate Companies

    The P/B ratio can be an easy way to determine a company's value, but it isn't magic!

  10. Which Mutual Fund Market Cap Suits You?

    Different funds invest in companies with different market caps. Find out which is right for you.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center