Understanding Your Personal Rate of Return

Knowing your personal rate of return can help you determine if you're on track to meet your investment goals

Morningstar.co.uk Editors 12 July, 2013 | 7:00AM
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Your fund says it finished the year up 15%. The Morningstar Fund Analyst Report says the same. Yet you only made 10% on the fund for the year.

The fact is, returns depend a lot on how you calculate them. Your actual investment or personal rate of return in a fund may be better—or worse—than you think. Knowing your portfolio's actual returns can help you determine if you're on track to meet your investment goals, and whether your funds are living up to your expectations.

Reported Returns Versus Personal Rates of Return

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.