How to Calculate Investment Returns on Mutual Funds

by Susan Reynolds

A mutual fund's investment return is the amount of money by which it has decreased or increased in value. Its most recent annual return is of particular significance to a potential investor. This is calculated over the period of one year. For example, if you invest $5,000 and realize an annual return of 8 percent, you made a profit of $400. Most investors look at a mutual fund's past performance as a predictor of future performance, but it's not always accurate.

Write down the amount of money you have invested in a mutual fund and include any distributions you have reinvested into it. For example, if you invested $5,000 in a mutual fund and reinvested a $500 distribution, write down $5,500.

Subtract your original investment from the number you wrote down in Step 1. For example, $5,500 - $5,000 = $500.

Divide the number you got in Step 2 by your initial investment amount. For example, $500 / $5,000 = 0.1.

Multiply the answer you got in Step 3 by 100 to get the percentage. For example, 0.1 X 100 = 10 percent. This is your return on your investment.

Warning

  • Transaction fees and commissions can reduce your return by a few percentage points.

Items you will need

  • Calculator