Calculate Annualized Rate of Return
Formula to Calculate Annualized Rate of Return
The rate of return over a given period expressed on an annual basis or as a return per year. Annualized rate of return is computed on a time-weighted basis.
(1) In Russell Performance Attribution (RPA), the geometric average investment return for a period greater than or equal to one year, expressed as a 12-month period.
(2) In Russell Performance Universes (RPU), annualized rate of return is calculated as follows:
| Where | Equals |
| Ra | Annualized rate of return |
| Rc | Cumulative rate of return |
| P | Periodicity (number of time periods in a year: |
| N | Number of observations |
For over 1,000 additional terms and definitions please see our Investment Glossary Guide.
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