Business, Legal & Accounting Glossary
The return on investment which takes into account the change in price plus dividends or interest received. The total return for a fund reflects changes in net asset value and reinvestment of all distributions in additional shares of the fund.
Total return is the sum of dividends, interest, and capital gain or loss. Total return is calculated for a certain time period, usually one year. Total return is used with stocks, bonds, mutual funds, options, etc. For example, if a stock has a 3% dividend and a 12% increase in price when it is sold, its total return will be 15%. If it has a 3% dividend and a 12% loss in price when sold, its total return will be -9%. Total return is a common goal among investors, though high dividends and price appreciation are often not attainable with the same investment. There are some mutual funds, aptly called total return funds, that seek particular stocks and bonds that maximize total return.
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This glossary post was last updated: 22nd March, 2020