How to determine return on investment

[Realdrumming]

Hello, I have some bond funds invested with Vanguard. Core fund, Tips fund, High Yield fund ect. Vanguard will show you the cost basis total return for each fund. For example now I have a 1% return on the Core fund.

To give me a more accurate picture of my return, should I ADD the monthly yield of the fund to the 1% mentioned above to arrive at what the total return is (approx). In this case the monthly yield is 4.3%. Adding the 1% gives me a return of 5.3%.

Assuming the yield says fixed (which it won't), is this an accurate way of determining my return on investment?

Thank so much!

[dbr]

If you are reinvesting the dividend than the return is defined and would be as published by the fund company, one year, three year, etc. In general in this case you can just calculate the yield from the present value of your holding, the initial value of your holding, and the time. The formula for compound annual growth rate which is the annualized return in this case is this: https://www.investopedia.com/terms/c/cagr.asp Calculators are available on line.

If there are cash flows to the holding, such as contributing or withdrawing money, cashing the dividends in particular, then the return over that time is not defined. Instead one can compute an internal rate of return: https://www.investopedia.com/terms/c/cagr.asp The IRR depends on the dates and amounts individually of all the cash flows.

[ruralavalon]

Welcome to the

Hello, I have some bond funds invested with Vanguard. Core fund, Tips fund, High Yield fund ect. Vanguard will show you the cost basis total return for each fund. For example now I have a 1% return on the Core fund.

To give me a more accurate picture of my return, should I ADD the monthly yield of the fund to the 1% mentioned above to arrive at what the total return is (approx). In this case the monthly yield is 4.3%. Adding the 1% gives me a return of 5.3%.

Assuming the yield says fixed (which it won't), is this an accurate way of determining my return on investment?

Thank so much!

For Vanguard Core Bond Fund (VCOBX) look at

30 day SEC yield
4.62%

ASEC yield footnote code

as of 11/26/2024

SEC Yield is the best predictor future return, and is "BASED ON HOLDINGS' YIELD TO MATURITY FOR PRIOR 30 DAYS;DISTRIBUTION MAY DIFFER".


If instead you want to know past returns then look under the "distributions" tab on Vanguard.

[Realdrumming]

Thanks for the help.

I thought to determine your approx return you look at your gain or loss of the stock (Vanguard Core as mentioned) then you factor any monthly yield.

Isn't this is also how you look at dividend earning company's? The stock price may go up or down even though the dividend may continue. It's great that the company may offer a high dividend but if the stock value goes down significantly then the dividend doesn't really reflect the return on a given day...

Seems like the vanguard gain loss of the mutual fund should be factored in addition to the yield.

[medchemguy]

If the holdings are in a Vanguard account you can see the specific performance of a holding:

• Log into your Account on a computer (not phone).

• On the main page click on Performance (just below where it says welcome back).

• Click Filter (on the left). A menu opens on the right.

• Under Accounts unselect all by toggling the Select all button.

• Under Investments select the specific investment in the specific Account you want to get performance info on.

• Now scroll down to the bottom that menu and click Apply Filter.

• You should see performance for that specific investment.

• Scroll down the page you will see the Income (dividends/cap gains) reinvested or not, etc. on a monthly basis for the date range selected for the displayed Investment returns graph.

[dbr]

Thanks for the help.

I thought to determine your approx return you look at your gain or loss of the stock (Vanguard Core as mentioned) then you factor any monthly yield.

Isn't this is also how you look at dividend earning company's? The stock price may go up or down even though the dividend may continue. It's great that the company may offer a high dividend but if the stock value goes down significantly then the dividend doesn't really reflect the return on a given day...

Seems like the vanguard gain loss of the mutual fund should be factored in addition to the yield.

Return includes dividend by definition, so return in a period of time is calculated as the end of period value including dividends reinvested less the beginning of period value all divided by the value at the beginning of the period and expressed as a percent. There cannot be cash flow to or from the holding or return is not defined. If the period in question is not a year it is conventional to annualize the return to a yearly rate though sometimes monthly return is quoted. A person might also report return to date and that is not annualized.

You can look up historical results for specific ticker symbols here: https://legacy.portfoliovisualizer.com/ ... sisResults Otherwise the fund company also publishes results: https://investor.vanguard.com/investmen ... mance-fees

I don't know what "cost basis total return" is. Is that some oddball thing Vanguard is reporting?