Annual Return on Investment

Annual Return on Investment: Annual return represents the percentage change of an investment for one year, where the dividends, reinvestment of distributions and capital gains should be figured in.

The whole misunderstanding of annual returns comes from the many terms that are closely related. Such terms include annualized return, compounded rate of return, average annual return and total return. Even though in the beginning they may sound confusing to you, with the time you will learn to make the difference among them.

Alternative Names - one-year return, 1-year return, yearly return, annualized return, compounded rate of return

For instance the annual return of the fund John invested in for the year 2005 was -19.6%.

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