Total return
The full return of an investment including both price change and income (dividends or interest) reinvested. It is the honest measure of what an investor actually earned.
Total return counts everything an investment produces: the change in price plus any dividends or interest, assumed reinvested. It is the complete picture, unlike price return, which ignores income and understates what a holder actually received.
Comparing strategies or benchmarks on a total-return basis is the fair standard, especially over long horizons, where reinvested income compounds into a large share of the end result.
Related terms
- BenchmarkA reference index against which a portfolio's return and risk are measured, the yardstick that says whether a result is good in context.
- Fund fees (TER)The ongoing cost of holding a fund, quoted as a total expense ratio (TER). Small-looking annual fees compound into large sums over an investing lifetime.
- ETF (Exchange-Traded Fund)A fund that trades on an exchange like a single share and usually tracks an index, giving low-cost, diversified exposure to a whole market.
Read it in context
- What an ETF isAn ETF is a fund whose shares trade on an exchange like a single company's. You own shares in the fund and the fund owns the assets, so one purchase gives you exposure to everything inside it. The wrapper is straightforward; what decides your risk is the rule that fills it and what it costs to hold.
- What a drawdown isA drawdown is the fall from a previous high down to the low that follows it, measured as a percentage. A second measure is its duration: the time spent below that high before it is regained. The two are read together to understand what holding the investment involved.