How to Calculate YTD Annualization

by Jackie Lohrey, studioD

Calculating year-to-date, or YTD, annualization is an important part of valuing potential and current investments. It allows you to project a short-term rate of return over the remaining months in a year in order to determine whether holding the investment is a wise choice. Calculating YTD annualization is less difficult when you use a two-step process that first produces a calendar YTD and then extends the calculation to annualize results.

Get the current value of your investment and subtract this amount from the initial investment amount. This number -- whether positive or negative -- is your starting point for calculating a calendar YTD return on your investment.

Convert your current profit or loss to a calendar YTD percentage by first dividing it by the amount of the initial investment and then multiplying this number by 100. If you initially invested $5,000 and today your investment is worth $5,500, the calculation will display as (2500/5000) * 0.1 and the result will be a calendar YTD return of 10 percent.

Get an annualization factor -- a number that allows you to extend your current rate of return over the remaining months in the year -- by dividing the number of the month you are currently in by 12. For example, if you are calculating YTD annualization in May, divide 12 by 5 to get an annualization factor of 2.4.

Extend the calculation and get a YTD annualization by multiplying calendar YTD return by the annualization factor. If your YTD calendar return is 10 percent and the annualization factor is 2.4, multiplying 0.10 * 2.4 gives you a YTD Annualization of 0.24, or the expectation that by year end you will achieve a return on your investment of 24 percent.


  • Get the current value of your investment by looking it up on sites such as Barcharts or Nasdaq, or by contacting your financial planner.

Items you will need

  • Calculator

About the Author

Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.

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