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Portfolio return definition

A basic concept that can quickly become very complex.

Beginner

Portfolio return is the calculation of return on a portfolio of stocks, bonds, cash or other assets. The calculation can be complex or easy depending on whether it is a holdings-based calculation or a returns-based calculation. In a holdings-based calculation for each period multiply the weights times the return on each asset and link them for sub-periods. For returns-based calculations, using pooled investments with a value, like the Net Asset Value on a mutual fund the calculation is much simpler. It's the end date value divided by the beginning date value, plus an adjustment for splits and cash flows.

Synonym: fund return


Other Original Content

Quiz

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Portfolio return is normally depicted on the x-axis in a risk-return plot. | True or False?

False, the y-axis.

In a Sentence

Wes:  Did you ever consider that our firm's success depends on your portfolio return ?
Eve:  Not until you put it that way.

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Keywords:
portfolio return
fund return
investment return
portfolio weight
historical return
realized return
holdings-based
returns-based
pooled investment