Annual return

Annual return,

Definition of Annual return:

  1. The annual return is the return that an investment provides over a period of time, expressed as a time-weighted annual percentage. Sources of returns can include dividends, returns of capital and capital appreciation. The rate of annual return is measured against the initial amount of the investment and represents a geometric mean rather than a simple arithmetic mean.

  2. Yearly statement which gives essential information about a firms composition, activities, and financial position, and which must be filed by every active incorporated or registered firm with an appropriate authority. Under the provisions of general corporate legislation, it must contain details such as (1) particulars of the stockholders (shareholders), debenture holders, directors, and the firms secretary, (2) list of charges (judgments and lien) against the firms assets, (3) address of the registered office and location of the register of members, along with (4) a copy of the latest financial statements. This information is put on public record, so that the lenders and other entities dealing with the firm can get a true and fair view of the state of its financial affairs.

  3. Total yearly return from an investment that includes dividend (or interest) and capital gains (or losses) but not commissions, fees, and taxes.

  4. Percentage yearly increase in the value of an investment, adjusted for the effects of compounding.

  5. The de facto method for comparing the performance of investments with liquidity, an annual return can be calculated for various assets, which include stocks, bonds, funds, commodities and some types of derivatives. This process is a preferred method, considered to be more accurate than a simple return, as it includes adjustments for compounding interest. Different asset classes are considered to have different strata of annual returns.

How to use Annual return in a sentence?

  1. An annual or annualized return is a measure of how much an investment has increased on average each year, during a specific time period.
  2. An annual return can be determined for a variety of assets, including stocks, bonds, mutual funds, ETFs, commodities, and certain derivatives.
  3. An annual return can be more useful than a simple return when you want to see how an investment has performed over time, or to compare two investments.
  4. The annualized return is calculated as a geometric average to show what the annual return compounded would look like.

Meaning of Annual return & Annual return Definition