The Basics

Return and performance

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The return generated by an investment fund is made up of growth in the value of the fund’s assets plus any income it may distribute to shareholders (many funds retain this income and reinvest it in additional assets).

The fund’s performance is measured by the return it delivers over a particular time period. The performance can then be compared with that of funds with similar investment policies, or with a benchmark such as a stock market index. Investors can analyse historical data about a fund’s performance to decide whether it is likely to meet their return targets. However, it should be remembered that past performance is no guarantee that those returns will be repeated in the future.

Risk and volatility
Risk and return
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