One Year Return

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Indicator Description

Although One Year Fund Return indicator can give a sense of overall fund short-term potential, it is recommended to look at mid and long term return measure before selecting a particular fund or ETF. The great way to validate fund short-term performance is to compare it with other similar funds or ETFs for the same 12 months interval.

One Year Return

 = 

(Mean of Monthly Returns - 1)

X

100%

One Year Return is the annualized return generated from holding a security for exactly 12 months. The measure is considered to be good short-term measures of fund performance. In other words, it represents the capital appreciation of fund investments over the last year. However when the market is volatile such as in recent years, One Year Return measure can be misleading.

One Year Return In A Nutshell

From a technical analysis stand point, you can look at the return of the chart and see where price currently is to the previous ears one year return. If the stock usually returns for example five percent, and right now it is currently on track to return two percent, that could indicate that the stock has higher to climb. It is important to use fundamental and technical analysis together as they will help to round your opinion. One year returns will give you a great place to start and can kick start your researching process.

As simple as it sounds, a one year return is nothing more than the annualized return of a equity over a one year period. When using a one year return, there are many ways to implement it in your investing strategy. If you have multiple equities that cover the specific time period, using the one year return can help you to narrow your search. Mutual funds would be a popular area to use a one year return, because you can take the one year returns, less the expense ratios, and that will give you a good idea of how each fund will return. Certainly some funds are more volatile, but this is simply a place to start.

Closer Look at One Year Return

Some things to keep in mind that a one year return may not be indicative of the future returns, as one year may not be enough time to capture all of the potential cyclical data points that can influence return. If you are looking long term, it would be a better idea to look at a three year or five year return, as that can pick up more influential data points. Again, be sure to ensure the returns are in line and not an outlier compared to similar products.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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