Compound Annual Return


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Related to Compound Annual Return: CAGR

Compound Annual Return

Compound Annual Return

The average year-on-year growth rate of an investment over a number of years. While investments usually do not grow at a constant rate, the compound annual return smoothes out returns by assuming constant growth. This makes accounting for the investment tidier. It is calculated as:

Compound annual return = (Ending Value / Beginning Value)^((1 / n) - 1) where n is the length of time of the investment in years. It is also called the compound annual growth rate. See also: Average Annual Growth Rate.
References in periodicals archive ?
Both plans average 10 percent compound annual return.
The median compound annual return of our sample group was only 6.
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Double Alpha ranked #1 over the 36 month period between February 2007 to January 2010 with a Compound Annual Return of 17.
The high dividend strategy, for example has a compound annual return of 34 percent, Dominick said.
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Trailing twelve month compound annual return through July.
In addition to a combined compound annual return of 70% for 1996 and 1997, the group's youth and community advocacy was a factor in COBI's selection of Investors 2000.
The company recorded strong profitability, with a five-year average compound annual return on equity of 24.