What is return?

Return: What an investment earns, as a percentage of what you put in. Price gains, dividends and costs all count.

Return shows how much your investment has earned compared with what you put in. It is usually given as a percentage per year.

Total return includes price gains or losses, as well as dividends or interest. Costs and tax still come off.

Past returns say nothing certain about the future. A high return often goes together with higher risk.

Example
You invest 1,000 euros. After a year the investment is worth 1,060 euros and you received 20 euros in dividends. You paid 5 euros in costs. Your return is 60 plus 20 minus 5, which is 75 euros, or 7.5 percent.

Watch out
Also look at the return after inflation. A return of 3 percent with 3 percent inflation adds nothing to your buying power.

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