Total return

RECENT NEWS
MarketWatch  Oct 9  Comment 
Pimco’s Scott Mather addresses the debate over whether the world largest bond fund is just too darn big for its own good.
Mondo Visione  Oct 8  Comment 
Japan Exchange Group, Inc., Tokyo Stock Exchange, Inc. and Nikkei Inc. have been jointly calculating and publishing the JPX-Nikkei Index 400 and its total return version (JPX-Nikkei 400 Total Return Index). In addition to these indices, the...
Mondo Visione  Oct 1  Comment 
September monthly net flows for the Total Return Fund were estimated to be -$23.5bn. Of note, the largest daily outflow occurred on the day of Bill Gross’s resignation from the firm, while outflows on the two following days were considerably...
SeekingAlpha  Sep 23  Comment 
By Anthony Ruben: I introduced the "Conservative Total Return" or CTR portfolio last month. The general philosophy of this method has allowed me to cumulatively beat, since 1999, the S&P 500 by a wide margin. Following the introduction of the...
Wall Street Journal  Sep 15  Comment 
Pacific Investment Management Co. is trying to replace two independent trustees overseeing its massive Pimco Total Return fund at a time when the fund is seeing extensive outflows.
Yahoo  Sep 3  Comment 
Investors pulled cash from the Pimco Total Return Fund for a 16th straight month in August despite some improvement in performance for the world's largest bond fund. The fund, run by Bill Gross, had net outflows of $3.9 billion in August, which...




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Total return

As investors use the term, total return is the change in value of an investment over a given period, assuming reinvestment of any dividends or capital gain distributions, expressed as a percentage of the initial investment. [1] The total return includes dividends, capital gains distributions, and the increase in the net asset value of the asset. [1]

Assets are usually purchased, or equivalently a deposit is made, in hopes of getting a future return, or interest from it. Assets are held to have some recurring, or capital appreciation. Assets are expected to give income, without any work on the asset per se. [2] Total return is all that is expected to return, assuming it is reinvested and expressed as a percent.

Example

An investor purchases an asset for $100 on 1/1/90. The asset yields $10 of cash flows at the end of one year. After one year, the asset has a market value of $130. The investors total return is thus:

Total Return = ( (130 + 10) / 100 ) - 1 = .4, or 40%

Cash Flow

Seen from a cash flow perspective, an asset is something that puts money in your pocket, and a liability is something that takes money out of your pocket. [2] The word investment originates in the Latin "vestis," meaning garment, or vest, and refers to the act of putting assets into others pockets. [3]

14c total from entire, sum total, all, whole. [4] 14c "to come back, act of coming back;" 16c a yield, a profit returning. [5]

References

  1. Mutual Funds: An Introduction to the Core Concepts by Dr. Mark Mobius ISBN-10: 0470821434 pg 83
  2. Rich Dad Poor Dad Robert T. Kiyosaki ISBN-10: 0446677450 pg61
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