Cumulative Return

AAA

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 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.

RELATED TERMS
  1. Annualize

    1. To convert a rate of any length into a rate that reflects ...
  2. Compounding

    The ability of an asset to generate earnings, which are then ...
  3. Global Investment Performance Standards ...

    Ethical standards to be used by investment managers for creating ...
  4. Growth Rates

    The amount of increase that a specific variable has gained within ...
  5. Compound Return

    The rate of return, usually expressed as a percentage, that represents ...
  6. Capital Loss Coverage Ratio

    The difference between an asset’s book value and the amount received ...
Related Articles
  1. Top 4 Reasons To Save For Retirement ...
    Retirement

    Top 4 Reasons To Save For Retirement ...

  2. 5 Ways To Measure Mutual Fund Risk
    Mutual Funds & ETFs

    5 Ways To Measure Mutual Fund Risk

  3. The Advantages Of Mutual Funds
    Mutual Funds & ETFs

    The Advantages Of Mutual Funds

  4. Will ETFs Eventually Replace Mutual ...
    Mutual Funds & ETFs

    Will ETFs Eventually Replace Mutual ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center