Your personal rate of return measures the performance of the investments that are a part of your own portfolio. It is unique to your account. Total return indicates whether your investment has gained or lost during a specific time frame. It can be a gauge to determine the effectiveness of your funds over a long period of time as well as a comparison against funds similar to your own.
Total return is comprised of two components.
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| 1. |
Capital appreciation is an increase in share prices. Just as a house can appreciate in value, so can the share price of your stocks and bonds. |
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| 2. |
Earnings includes interest (from bonds) and dividends (from stocks) as well as capital gains distributions. A capital gains distribution is any profit the mutual fund made from selling a particular investment — stock and/or bond — out of the portfolio. |
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| Add the 25% return of capital appreciation to the 5% return in earnings, you will get a total return of 30% from your mutual fund. |
An investor's personal rate of return is not the same as the mutual fund's total return. Total returns, as shown on your Delaware Investments quarterly Investment Update statements, provide historical performance for each mutual fund.
This information is intended to provide general investment education and is not intended to provide investment advice. For more specific information on how to allocate your investment savings plan, please contact your financial advisor or Delaware Investments.
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