How we calculate returns
Our return calculations are made in accordance with GIPS®*. This methodology is widely used as a standard measure of investment performance and is recommended for the calculation of total returns.
In your online service and in your annual statement, returns are presented both as a percentage and in monetary terms. The percentage return is time-weighted and shows the performance of your underlying funds since your first investment. The return in monetary terms reflects the actual change in value of your portfolio—whether it has increased or decreased—since inception.
The percentage return on your savings is time-weighted by valuing the portfolio at each transaction date and then calculating the return as a percentage. By taking contributions and withdrawals into account in this way, the resulting percentage return is independent of the size of the investment during the period.
Time-weighting makes the return on your holdings comparable with market indices or other alternative investments; however, it does not reflect the actual development of your portfolio. All charts are calculated using this method. To assess the actual return on your portfolio, you should therefore consider the return measured in monetary terms.
As a result, your savings may generate a positive return in monetary terms while showing a negative percentage return, and vice versa. This difference arises because transactions such as contributions and withdrawals affect the size of the capital—and therefore the actual development—while the percentage return is not influenced by the amount invested.
We report returns and market values after fees and taxes**.
Return calculations example
To illustrate the return calculations, we can use the following example:
Deposit on 1 January: SEK 100 000
Market value on 30 June: SEK 96 000
Deposit on 30 June: SEK 100 000
Market value on 1 July: SEK 196 000
Market value on 31 December: SEK 202 000
Abbreviations:
- TA: Total return
- MV: Market value
- C: Deposits/Withdrawals
- t: Time of deposit/withdrawal
- T: Final point of the measurement period
Return for the first half of the year:
(96,000 / 100,000) - 1 = -4.0%
Return for the second half of the year:
202,000 / (96,000 + 100,000) - 1 = 3.1%
Total return:
(96,000 / 100,000) × (202,000 / (96,000 + 100,000)) - 1 = -1.1%
Return in SEK for the first half of the year:
96,000 - 100,000 = SEK -4,000
Return in SEK for the second half of the year:
202,000 - 196,000 = SEK 6,000
Total return in SEK:
-4,000 + 6,000 = SEK 2,000
* The Global Investment Performance Standards (GIPS)® are a trademark owned by CFA Institute. CFA Institute has not been involved in the preparation of, nor has it reviewed, the information or calculations.
** Refers to yield tax applicable to insurance-based investment products.