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Horizon Return

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Horizon return
Total return over a given horizon.

Horizon Return
A discounted, total return on an investment or portfolio over a given time frame, called a horizon. For example, one might calculate the return on an investment over its first year or first five years, etc. See also: Horizon analysis.


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We disentangle the impacts of methods of computing long horizon returns by reviewing results to the same portfolios using, where possible, both average buy-and-hold (BH) returns and cumulated monthly rebalanced (RB) average returns.
While yield to call can look attractive under certain circumstances, buyers should take into consideration the lower reinvestment rates that will be offered for subsequent investments and should calculate an overall horizon return.
The concept of horizon return, which encompasses all of the potential sources of dollar return and which may be different from maturity value, is introduced.
 
 
 
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