What is 'Gross Rate Of Return'

Gross rate of return is the total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted over a specific period of time, such as a month, quarter or year. It is often quoted as the rate of return on an investment in advertising flyers and commercials.

BREAKING DOWN 'Gross Rate Of Return'

The gross rate of return on an investment can be substantially different than the rate of return that is realized after expenses. For example, the gross return realized on a mutual fund that charges a 5.75% sales charge will be very different than the return realized after the charge has been deducted. Mutual fund companies are therefore required to publish or provide both returns to investors for this reason.

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RELATED FAQS
  1. Does gross profit account for sales returns?

    Discover how accountants record the return of a saleable item and how that might impact the gross profit for a firm, either ... Read Answer >>
  2. Are gross sales and taxable gross sales the same thing?

    Learn the difference between gross sales and taxable gross sales and how these terms relate to the profit and tax liability ... Read Answer >>
  3. What are some of the limitations of only looking at the rate of return for an investment?

    Learn why only reviewing the rate of return for an investment poses a risk to the investor and what additional factors should ... Read Answer >>
  4. What's the difference between absolute and relative return?

    Knowing whether a fund manager or broker is doing a good job can be a challenge for some investors. It's difficult to define ... Read Answer >>
  5. What can cause the rate of return to be negative?

    Learn how poor company or sector performance, economic turmoil and inflation can cause the rate of return on an investment ... Read Answer >>
  6. How does the required rate of return affect the price of a stock, in terms of the ...

    First, a quick review: the required rate of return is defined as the return, expressed as a percentage, that an investor ... Read Answer >>
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