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Capital vs Total Return - How to correctly assess your fund's performance

When comparing the performance of different investments, investors need to remain aware of an important but often easily overlooked distinction – that between the capital (or price) returns on an investment, and its “total” returns. As this note will demonstrate, this distinction is especially important when it comes to investments that produce relatively high income compared to capital returns. The return on an investment usually involves two elements: the capital (or price) return, and the income return. The sum of both the capital and income return is then called the “total” return. In the case of shares, for example, the change in the share price of a listed company over time can be considered the capital return. For more click the link: (VIEW LINK)

David Bassanese
Chief Economist

Author, columnist, investment strategist and macro-economist. Previous roles at Federal Treasury, OECD, Macquarie Bank and AFR. I develop economic insights and portfolio construction strategies for BetaShares' retail and adviser clients.

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