How this calculation works
Net gain equals proceeds plus cash income minus additional fees and original cost. Divide by original cost for total return. Annualised equivalent return is (net ending value ÷ original cost)^(1/years) − 1; it assumes cash income is valued at the end.
A worked example
R100 000 growing to R121 000 over two years with no separate income or fees has a 21% total return and a 10% annualised equivalent return.
Assumptions & limitations
- Cash flows are treated as terminal values, not dated money-weighted returns. Do not add reinvested distributions twice or fees already removed from proceeds. Taxes are excluded. Annualisation is undefined if the net ending value is zero or negative.
