how are they calculating my ROR below?
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Thread: how are they calculating my ROR below?

  1. #1
    Join Date
    Mar 2012

    how are they calculating my ROR below?

    One of my RBC holdings stmts (Canadian Equity Funds) as of Dec 2011 states: Total amount in 3,741.20. Change in Value: 746.59. Current value is 4,487.79. It states my personal rate of return (annualized since 2003) is 5.65%.

    How is that possible?

    ROR = profit/cost, therefore 746.59/3741.20 = 20%/9 years = 2.2% per year.

    Where am I going wrong in my calculations?

  2. #2
    Senior Member HaroldCrump's Avatar
    Join Date
    Jun 2009
    Assuming entire amount was contributed on 1/1/2003, your IRR until 12/31/2011 is 2.04%.
    Also, assuming no distributions were withdrawn etc.
    I have no idea how they are getting 5.65% either.

  3. #3
    Senior Member
    Join Date
    May 2009
    Well, math errors aside (ie. RoR is not measured by simple division) , you're probably overlooking reinvested distributions. They matter because every reinvested distribution is a new purchase.

    For example, if you originally put ~$2736 into this fund on December 31, 2002, and if you received ~$1005 in distributions (all reinvested) over the years, then RBC would (should) report a book value of ~3741, and if the value was $4488 on Dec 31 2011, your personal RoR as of that date would be ~5.65%.

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