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Investment Returns Calculator

What return you actually got, once your own deposits are taken out of it.

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Everything you added over the period. Enter 0 if you added nothing.

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years

Results update as you type. Nothing is sent anywhere.

Annualised return — Approximate, and the number to compare against a benchmark.
Money the market made you —
Total return over the period —
Of the current value, your own money —
Share that is growth —
What the raw value change suggests — End divided by start. Flattering and wrong when you have been paying in.

How this is worked out

Looking at your account and comparing today's balance with what it was five years ago tells you almost nothing, because most of the rise is money you put in yourself. This separates the two.

First, what the market actually contributed:

gain = (value now + withdrawals) − (value then + contributions)

Then that gain has to be measured against the money that was working for it. This is the awkward part, because a deposit made last month has not had the same chance to grow as one made five years ago. The standard approximation treats contributions as arriving evenly through the period, so on average they have been invested for half of it:

average capital = start + (contributions − withdrawals) ÷ 2

Then the annualised figure is the steady yearly rate that would have produced the same gain on that average capital.

Compare the headline answer with the raw value change at the bottom. That bottom line is what your brain does automatically, and it is usually far too flattering.

A worked example

You started with 20,000, paid in 18,000 over five years, and the account now shows 46,000.

  • The market made you: 46,000 − 20,000 − 18,000 = 8,000
  • Average capital at work: 20,000 + 9,000 = 29,000
  • Total return: about 27.6%
  • Annualised: about 5%
  • Your own money in that 46,000: 38,000

Now the naive view. The balance went from 20,000 to 46,000, which looks like 130% — a spectacular five years. It was a perfectly ordinary one. The other 26,000 of the rise is simply your own savings arriving.

This matters when you judge a fund, an adviser, or your own decisions. Five per cent a year against a market that returned eight is a poor result wearing a very encouraging disguise.

What this doesn't cover

  • The half-period assumption is an approximation. It is accurate for steady monthly contributions and less so if you made one large deposit right at the start or right at the end. For an exact figure you need every dated cash flow and an internal rate of return calculation.
  • The result is a nominal return. Subtract inflation for the real one.
  • Fees already paid inside the fund are reflected in the value, so this is a net-of-fund-fee return. Fees charged separately to your bank account are not.
  • Dividends reinvested inside the account are counted as growth, correctly. Dividends paid out to you should be entered as withdrawals.

Common questions

Why not just compare the balance with what it was?

Because that mixes your saving with your investing. Someone who saves diligently into a poor fund can watch the balance climb every year and conclude the fund is doing well. Separating the two is the only way to know whether the investment is earning its keep.

What should I compare the annualised figure against?

A benchmark holding similar things over the same period — a broad index if you hold shares, for instance. Comparing against a friend's number, or against a different period, tells you nothing. And one or two years is too short to judge anything.

My return is negative. Have I done something wrong?

Not necessarily. Over short periods negative returns are ordinary and expected, particularly if you started shortly before a fall. What matters is whether the reason is the market as a whole or something specific to what you hold — which the benchmark comparison will tell you.

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