Attention! Your browser may be out of date.

Please ensure you are using a current supported browser for the best and safest web experience. For more information click here.

CI Investments
Search:       Go
    Advanced Fund Search

Home About Us Contact Us CI Financial   Site Map Français
Client access
Advisor access
Products
Prices & Performance
Services
Portfolio Management
Tools and Calculators
Learning Centre
Investment Basics
Tax Centre
RESP Centre
FAQs

Careers
    MARKETS


 
    Related Businesses
 
CI Institutional Asset Management


Investment Basics

Calculating Personal Rates of Return

CI Investments uses a Time-Weighted methodology to calculate clients' personal rate of return. 

The formula for the time-weighted rate of return with daily valuation is as follows:

Where

R =

MVE
MVB

- 1

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 =

MVE
MVB

- 1


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%

back »

 
  Privacy & Security | Legal   Funds mentioned on this website are available to Canadian residents only. © 2017 CI Financial Corp.