Compound Annual Return

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Related to Compounded 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 ?
News outlet, Reuters said, "As an asset class, timberland outperformed stocks between 1987 and 2007, with the National Council of Real Estate Investment Fiduciaries' timberland index generating a compounded annual return of 15.
American Capital earned a 24% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.
The firm has achieved a 59% compounded annual return since its inception.
Kottke-Commodity Capital consistently places in the Top 10 of its category in BarclayHedges' monthly rankings and ranks number one in 36-Month Compounded Annual Return Sharpe Ratio.
92, Hibbett has generated a compounded annual return of approximately 23% to its stockholders since its IPO.
Since our company's founding in 1982, Susquehanna Bancshares has worked to provide strong results for shareholders, increasing dividends each year and generating a 14 percent compounded annual return.
We are very pleased that the sale represents a compounded annual return to Thayer's investors in excess of 40 percent," said Thayer Co-Chairman Frederic V.
It is calculated by dividing the compounded annual return by the average maximum drawdown minus 10%.
Based on recent prices of WBCO, Frontier's compounded annual return on this investment has been in excess of 15%.
American Capital earned a 26% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.
Elliott has earned a compounded annual return of approximately 14% since inception, and has registered a calendar year loss only twice in 36 years of existence.