
Investment Basics
Calculating Personal
Rates of Return
CI Investments uses a TimeWeighted methodology to calculate clients' personal rate of return.
The formula for the timeweighted rate of return with daily valuation is as follows:
MVE

is
the market value of the portfolio at the end of the current period excluding any cash flows in the period but including any income (reinvested distributions) in the current period. 
MVB

is the market value of the portfolio at the end of the previous period (the beginning of the current period) including any cash flows at the end of the previous period and any accrued income to the end of the previous period. 
Linking Formula:
Personal Rate of Return = {[(1+R1 ) x (1+R2 ) x …(1 + Rn )] – 1} x 100.
Where
R1 = the first period calculation
R2 = the second period calculation
Rn = the last period calculation
Annualized Formula:
Annualized returns express the rate of return of a portfolio over a given time period on an annual basis, or return per year.
Rate = ( 1 + Link_Rate) ( 365/ (End Date  Start Date) )
only when (End Date  Start Date) is more than 365 days
Example:
Step One
January 5 
Initial Purchase 
Fund XYZ 
1,000 units @ $10.00 
$10,000.00 
January 15 
Purchase 
Fund XYZ 
500 units @ $ 9.50 
$ 4,750.00 

Previous Balance 

1,000 units @ $9.50 
$ 9,500.00 




$14,250.00 
February 15 
Purchase 
Fund XYZ 
450units@$10.25 
$ 4,612.50 

Previous Balance 

1,500 units @ $10.25 
$15,375.00 




$19,987.50 
March 15 
Purchase 
Fund XYZ 
425 units @ $10.7 
$ 4,568.75 

Previous Balance 

1,950 units @ $10.75 
$20,962.50 




$25,531.25 
March 31 
Previous Balance 

2,375 units @ $10.81 
$25.673.75 





Step Two
R = [Ending market value (  purchases + redemptions + income distributions) – 1]/Beginning Market Value
R Jan 15 = [(14,250 – 4,750)/10,000)]1
R Jan 15 = (9,500/10,000)1
R Jan 15 = 0.05
R Feb 15 = [(19,987.50 – 4,612.50)/14,250)]1
R Feb 15 = (15,375/14,250)1
R Feb 15 = 0.07895
R Mar 15 = [(25,531.25 – 4,568.75)/19,987.50)]1
R Mar 15 = (20,962.50/19,987.50)1
R Mar 15 = 0.04878
R Mar 31 = (25673.75/25,531.25)1
R Mar 31 = 0.00558
Step Three
Personal Rate of Return = {[(1+R1 ) x (1+R2 ) x ?(1 + Rn )] ? 1} x 100
PROR = {[(1+ R Jan 15) x (1+ R Feb 15) x (1+ R Mar 15) x (1+ R Mar 31)] ? 1} x 100
PROR = {[(0.95) x (1.07895) x (1.04878) x (1.00558)]1} x 100 = 8.10006 or 8.1%
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