Difference between "Avg. Annual Return (%)" and "Return (%)"
The portfolio page of the Investing tab can be customized with various calculations. Two are different but the descriptions don't tell me what the difference is.
Avg. Annual Return (%) := Average total return (in [time span] period); also known as internal rate of return (IRR)."
Return (%) := Change in value, plus dividends, capital gains and (over past [time span])
Each shows a close but different value for comparable time frames. So there has to be a difference. From the definition, one might think the Return (%) is not annualized, but, as I said, the values even over three and five year periods are similar. So Return (%) has to be annualized too. And if, as it says it includes dividends, return of capital and gains (presumably realized and unrealized), then I think that would be the same as the internal rate of return.
Can someone shed some light on this mystery? Has Quicken published the math definitions of these functions?
Answers
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The Avg. Annual Return (%) is an annualized calculation based on your transactions.
Return (%) is downloaded from Quicken's quote provider. It is only available for publicly traded securities. It is supposed to be the security's return as of today over the given period, assuming any distributions were reinvested. It is not affected by when you bought or sold shares. It does not change if you change the As of date. Sometimes the data is missing or out of date.
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Thanks, Jim. That explains why the values would be slightly different on stocks that have not been bought or sold. The quote provider is probably using different dates for dividends and capital gains returns for Return (%), whereas Quicken's Avg. Annual Return (%) is using the dates posted to the account. Based on that the Return (%) would be really valuable for comparison purposes, but you say its data is unreliable. That's too bad. I could use that information if it were trustworthy.
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