How do you calculate Annualised Return?

All of our tracked strategies include an annualised return figure.

We calculate the return over the period since inception and then perform a calculation to figure out the annualised figure. i.e. 100 x ((1 + R)^(1/N) - 1) gives you your annualized return for the period, where N is the number of years since inception and R is the return since inception.

Please note that the annualised return is a historic (backward looking) figure. It does not reflect expected returns and past performance is not an indication of future returns!

At present, we compare this measure versus the index, which we define as the FTSE 100 as the main London market benchmark.

Do you track total shareholder return?

Please also note that the published screen returns are not 'total returns', as they do not include dividend yields but merely show capital growth. You can read more about how TSR is calculated in this article here. This is because factoring in corporate actions like dividends make the rebalancing process much more complicated.

In the interim, that means that the screens are likely to understate performance, especially for high yielding income screens like the Dogs of the Dow. However, we compare the screen performance against the FTSE 100 return, excluding dividends, to make the comparison a fair one.