What Is Total Return? Meaning & Example
Definition
Total return combines price change with income such as dividends or interest. It gives a complete picture of how an investment performed.
Related terms
Dividend yield is the annual dividend per share divided by the share price, expressed as a percentage. It shows the income return from dividends alone.
Capital GainsA capital gain is the profit from selling an asset for more than you paid. Many tax systems tax capital gains, often at different rates depending on how long you held the asset.
Compound InterestCompound interest is interest earned on both your original money and the interest already added to it. Over long periods it can make savings grow much faster than simple interest.
What is Total Return?
Total return combines price change with income such as dividends or interest. It gives a complete picture of how an investment performed.
Can you give an example of Total Return?
A stock rising 6% that also paid a 2% dividend had a total return of about 8%.