A mutual fund’s return is the amount of money it has generated for investors over a period of time as a percentage of its value at the beginning of that period. You earn money from the dividends a mutual fund distributes as well as from the capital gains, or investment profits, it distributes. You also earn money when you sell your fund shares at a higher price than you paid to acquire them. Year-to-date return is measured from the beginning of the current year up to the present date. Knowing the year-to-date return helps you to assess how well a mutual fund has performed since the first of the year.
1. Look up your mutual fund’s net asset value at the beginning of the year and at the present time. NAV is the value per share, and you can find this information in your records or from your broker. The current NAV can be obtained from your broker or any financial website that provides stock quotes. In addition, look up the amount of dividends and capital gains per share the mutual fund has distributed since the beginning of the year. For example, assume a mutual fund had a $10 NAV on the first day of the year; its current NAV is $12, and the fund has paid $1 per share in dividends and $1 per share in capital gains so far this year.
2. Substitute your own values into the following formula: (current NAV - beginning NAV + dividend distributions + capital gains distributions) / beginning NAV Continuing the example, substitute the values to get ($12 - $10 + $1 + $1) / $10.
3. Calculate the numbers inside the parentheses. In the example, subtract $10 from $12 to get $2. Add together $2, $1 and $1 to get $4. This leaves $4 / $10.
4. Divide the numerator by the denominator to calculate the year-to-date return. Multiply the result by 100 to convert to a percentage. If you get a negative number, you have a negative year-to-date return, which means you’ve lost money on the investment since the first of the year. Concluding the example, divide $4 by $10 to get 0.4. Multiply 0.4 by 100 to get a 40 percent year-to-date return on the mutual fund.