Portfolio Return Calculator

A portfolio that grew from fifty thousand to seventy thousand after eighteen thousand of deposits gained two thousand, not twenty. It is an obvious point and it is the single most common error in self-reported investment returns.

This separates the two. Contributions and withdrawals are removed from the change in value, the remainder is the investment gain, and that gain is measured against the capital that was actually at work over the period rather than against the starting balance.

Result

Investment gain

$12,000

Total return: 18.46%
Annualised return: 5.81%
Return if contributions were ignored: 24%
Net contributions: $30,000
Average capital at work: $65,000
Change in value: $42,000
Share of the change from contributions: 71.43%

This tool is for informational and educational purposes only. It is not financial or investment advice, and past performance does not guarantee future results.

Contributions are not returns. A portfolio that grew from 50,000 to 70,000 after 18,000 of deposits gained 2,000, not 20,000 - which is the mistake this calculation exists to prevent.

The adjustment assumes contributions arrived evenly across the period. Where a large deposit landed near the start or the end, a proper money-weighted calculation using actual dates will differ.

Annualising a short period magnifies noise. A strong quarter annualised is a statistic, not an expectation.

How to use the portfolio return calculator

Enter the starting and ending portfolio values.
Enter total contributions and total withdrawals over the period.
Enter the length of the period in years.
Read the investment gain first - it is the figure most reports get wrong.

What people use this for

Working out what a portfolio actually earned as opposed to what it received.
Annualising a return across a period that is not a whole year.
Measuring performance on an account being drawn down.
Comparing your own return against a benchmark on a like-for-like basis.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A portfolio with regular contributions

From $50,000 to $92,000 over three years with $30,000 contributed.

Investment gain: $12,000
Total return: 18.46%
Annualised return: 5.81%

A portfolio being drawn down

From $400,000 to $385,000 over two years with $48,000 withdrawn.

Investment gain: $33,000
Annualised return: 4.3%
Return if contributions were ignored: 8.25%

Contributions are not returns

The change in a portfolio value is the investment result plus everything paid in minus everything taken out. Reporting the change as a return credits the investments with the deposits, which flatters accounts in their accumulation years and understates accounts in drawdown.

The second example above shows the reverse case: a portfolio that fell in value while the investments actually gained.

Timing of contributions matters

The adjustment here assumes contributions arrived evenly across the period, which is a reasonable approximation for regular investing and a poor one for a single large deposit near either end.

Where a lump sum landed at a specific date, a proper money-weighted calculation using actual dates will produce a different and more accurate figure.

Annualising short periods magnifies noise

A strong quarter annualised looks impressive and means very little. The compounding maths is correct; the implication that the rate would persist is not.

Annualised figures become informative over multiple years. Below that they are a conversion, not a measurement.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

Investment gain is the change in value minus net contributions.
The return is measured against the starting value plus half the net contributions, which approximates the average capital at work.
The annualised figure compounds that return across the number of years entered.
Contributions are assumed to have arrived evenly. Dated cash flows would produce a more precise money-weighted return.
Results are arithmetic on the numbers you enter. Nothing here predicts prices or connects to an exchange, broker or market data feed.
Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This tool is for informational and educational purposes only and does not constitute financial or investment advice. Past performance does not guarantee future results.

Nothing on this website is a recommendation to buy, sell or hold any security, currency, derivative or digital asset. No price is predicted and no return is promised or implied.

Trading and investing carry the risk of substantial loss, including the loss of your entire capital. Leveraged products can produce losses that exceed your deposit. Tax treatment depends on your jurisdiction and your circumstances.

Frequently asked questions

Why not just divide the gain by the starting value?

Because contributions added during the period were also working. Measuring against the starting value alone overstates the return for anyone who contributed.

Is this a time-weighted return?

No. It is an approximation of a money-weighted return, which measures what your capital achieved. Time-weighted returns measure the strategy independently of contribution timing and are what funds report.

Does it include dividends?

If they were reinvested, they are in the ending value already. If they were withdrawn, enter them as withdrawals.

Should I annualise a six-month period?

The tool will, and the result should be read with caution. Short-period annualisation amplifies whatever happened to occur.

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