Knowledge Center

What is Absolute Return?

 

Absolute Returns helps investors to calculate the simple returns on their initial investment. What an investor needs is only the initial and the current or the ending Net Asset value (NAV) of the scheme. In calculating the point to point or absolute return, the holding time does not play a role. So if the initial NAV was, say, Rs. 20 and now after 3 years, it is Rs. 40, the point to point return comes to 100 percent.

 Formula to calculate Absolute Return:

 Absolute return = {(Current Value – Initial value)/Initial Value}*100

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