what is period to date return? thanks guys!

CFA Level III
#1

According to GIPS:

Advertisements that state a claim of compliance and present performance must also

present one of the following sets of total returns:

a. one-, three-, and five-year annualized composite returns through the most recent period;

b. period-to-date composite returns in addition to one-, three-, and five-year annualized

composite returns through the same period of time as presented in the corresponding

compliant presentation; or

c. period-to-date composite returns in addition to five years of annual composite returns

calculated through the same period of time as presented in the corresponding compliant

presentation.

what is period to date return???

1 Like
#2

It’s from the beginning of their most recent usual reporting period until today.

If a company has a fiscal year that corresponds to a calendar year, for example, and issues an interim report on April 10, then period-to-date returns would be from January 1 to April 10. It simply means “returns so far this period”.

#3

thanks!

what is the difference between annual and annualized? are they two different things?

#4

annual return = return for the year.

annualized return = return for a period different from a year - converted to a yearly basis.

#5

i am confused…

what is five - year annualized return?

#6

And GIPS doesn’t allow you to annualize returns for a period of less than a year; i.e., you may not extrapolate returns.

#7

It’s the annual (compound) return equivalent to the actual five-year return.

If your annual returns were, say, 1%, 4%, -2%, 10%, and 6%, then the 5-year annualized return is 3.72%.

#8

i dont get why you cannot annualize returns

but you can annualize standard deviations

#9

say you received a 10% one month return - would you say you achieved an annualized return of 120% (assuming arithmetic)- aren’t you overstating / mistating the performance - and thus “inflating” expectations?

#10

I assume you mean “why you cannot annualize returns when the holding period is less than one year”. Because then you’re not reporting your performance; you’re reporting an extrapolation of your performance. You’re merely guessing about what you would have done for the rest of the year. In a performance report you’re not allowed to guess.