To calculate the year-to-date (YTD) return on a portfolio, subtract the starting value from the current value and divide by the starting value. Multiplying by 100 converts this figure into a return percentage, which is more useful than the decimal format in comparing the returns of different investments.

What Is the Year-To-Date Return?

YTD return is simply the amount of profit (or loss) generated by an investment since the beginning of the current calendar year, usually January 1st or else the first trading date of the year or first day of the fiscal year. YTD calculations are commonly used by investors and analysts in the assessment of portfolio performances because of their simplicity.

Using the YTD period sets a common time frame for assessing the performance of different securities against each other and their benchmarks. YTD is also useful for measuring price movements relative to other data, such as financial performance or economic indicators. YTD measurement is limited in that the considered changes in length and the trends implied by YTD performance early in the year can be misleading.

Key Takeaways

  • Year-to-date (YTD) return measures the performance of an investment from the current date since the start of the year.
  • YTD returns are used to make standardized comparisons between investments and their benchmarks.
  • To calculate YTD return, subtract its value on Jan 1 of the current year from its current value. Then, divide the difference by the value on Jan 1, and multiply the product by 100 to convert it to a percentage.

Calculating Year-To-Date Returns

Calculating the YTD return of a portfolio is the same as for a single investment. Take the current value of all assets in the portfolio and subtract the total amount invested on the preceding Jan. 1. This renders the total YTD return in dollars.

Dividing this figure by the original value and multiplying by 100 converts the figure into a percentage that reflects the return generated by each dollar originally invested.

Example of YTD Return

Assume that on Jan. 1 of the current year you invested a total of $50,000 in three different assets. On Dec. 31, this portfolio is comprised of the same three assets valued at $10,000, $15,000, and $35,000, respectively. The YTD return in dollars is simply $60,000 - $50,000 plus $10,000. The YTD return percentage is 20%, or $10,000 / $50,000 * 100. This means that over the past year, each dollar you invested in January produced another 20 cents of profits.

Interest Payments

If your investment paid interest or dividends throughout the year, this amount must be included in the current value of the portfolio since it counts as profit. Assume the portfolio in the example above also paid annual dividends totaling $500. The YTD return is then 21%, or ([$60,000 + $500] - $50,000) / $50,000 * 100. Though the value of the portfolio has not changed, its YTD return is higher because it generated income through dividends as well as capital gains.