Thread by @1PageFinance

Term of The Week.

Rolling Return 😵‍💫

A Thread 🧵

There are several types of returns to get an idea about stocks or funds. The most widely used around the financial world is trailing returns.

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While it is good to glance at trailing returns, that is a point to point return, it does not actually give the idea about what an investor has experienced over time. 2/10

Rolling returns are the most underrated types of returns, it is useful for examining the behaviour of returns for holding periods, similar to those actually experienced by investors.

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Rolling returns can provide a more accurate picture for an investor than a single snapshot of one period.

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Rolling returns highlight the frequency and magnitude of an investment's stronger and poorer periods of performance.

It gives a better idea about the fund's more comprehensive return history, not overshadowed by the most recent data.

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A rolling return is the average of a series of returns over a long period of time. Here is the simple representation of data point.

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Data points of 5 year rolling returns of Nifty. (Reg. fund)

• 27 August 2013 -> 27 August 2018 ->24.62%

• 28 August 2013 -> 28 August 2018 -> 24.34%

• 29 August 2013 -> 29 August 2018 -> 24.19%
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• 02 August 2016 -> 02 August 2021 -> 14.54%

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5-year rolling returns of ICICI Nifty Next 50 Index Fund and UTI Nifty Index Fund.

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Analyzing rolling returns could demonstrate annual performance not simply starting Jan-1 and ending Dec-31 but also beginning Feb-1 and ending Jan-31 of the next year, then March-1 through Feb-28 of the next year, and so on.

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A 10-year rolling return could highlight an investment’s best and worst decades in this form.

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Few sites to compare rolling returns of mutual funds 👇

https://twitter.com/1PageFinance/status/1424789638560948226

If you found it useful, please re-tweet the first tweet below 👇

https://twitter.com/1PageFinance/status/1424784971286286337