Investment Return Calculator

How to Measure Investment Returns Accurately

Total return tells you the overall percentage gain or loss on an investment, but it can be misleading when comparing investments held for different lengths of time. A 60% total return over 10 years is actually a more modest result than a 30% return over 3 years. Annualized return — also known as compound annual growth rate (CAGR) — solves this by expressing any multi-year return as an equivalent yearly rate, making direct comparisons possible.

For portfolios with ongoing contributions or withdrawals, the time-weighted rate of return (TWR) is the industry standard used by Canadian portfolio managers. TWR eliminates the impact of cash flows so you can evaluate the fund manager’s performance independently. The money-weighted rate of return (MWR), by contrast, reflects the actual experience of the investor, including the timing and size of deposits. CRA and financial institutions in Canada are required to report personal rates of return on client statements.

Return Metrics Compared

Always request annualized, after-fee returns when evaluating any Canadian mutual fund or ETF. The CRM2 regulations require dealers to disclose dollar costs and personal rates of return, giving investors the transparency needed to compare options and hold advisors accountable.