cumulative return

[yeatze]

hi how do i calculate cumulative return on the rate of return of
mutual funds

 

[ryguy7272]

Can you provide some details? What do you have now? What do you expect to
see?

Regards,
Ryan--

 

[Fred Smith]

Cumulative return is simply the compounding of each of your returns.

Assume you started with an investment of $1, and you had returns of 7%,
5.5%, -2.3% and 14.2%.

Your ending value would be:
=1.07*1.055*.977*1.142

And your cumulative return would be the above result less the $1 you started
with.

In formula terms, if you have returns of i1 to in, your cumulative return
is:

=(1+i1)*(1+i2)*...*(1+in)-1

Regards,
Fred.

 

[ryguy7272]

General Solution:
http://www.investopedia.com/terms/c/cumulativereturn.asp


Some Food for Thought
http://finance.yahoo.com/funds/how_...mpound_Annual_Returns,_Not_Cumulative_Returns

Regards,
Ryan--

 

[Fred Smith]

Investopedia has the correct calculation when you have the opening and
closing price of the security. However, the OP had a series of returns,
therefore the formula is different.

I also agree with Yahoo that you should use compound annual returns to
compare investments, but that's not what the OP asked for. He asked how to
calculated the cumlulative return, given a series of periodic returns.

Regards,
Fred.