Returns in 2012
When looking at the performance of a share (stock) or index for the year 2012 you will often see a graph that has the basic return and a higher total/cumulative return, which includes the reinvestment of dividends.
Illustrating with the FTSE 100 and data from Thomson Reuters Datastream:
- FTSE100 on 31/12/2011 – Price Index (PI) is 5572.28 – Return Index (RI) is 3770.37
- FTSE100 on 31/12/2012 – Price Index (PI) is 5897.81 – Return Index (RI) is 4146.4
- FTSE100 percentage return for 2012 – basic return is 5.84% – total return is 9.97%
Return Formula: Retit = ( RIit – RIit-1 ) / RIit-1 (multiply by 100 for percentage return)
For Total Return FTSE 100 in 2012 : (4146.4 – 3770.37)/3770.37 = 0.099733 [ 9.97% to two significant digits]
You can get Datastream to calculate this directly using the formula PCH#(FTSE100(RI),1Y) for 31/12/2012 – see previous post Total shareholder return (July 2011)
Illustrating with the Sainsbury (J) and data from Thomson Reuters Datastream (screenshot from Bloomberg Total Return Analysis (TRA) function):
- SBRY on 31/12/2011 – Price adjusted (P) is 302.9 – Return Index (RI) is 11651.27
- SBRY on 31/12/2012 – Price adjusted (P) is 345.1 – Return Index (RI) is 13989.18
- Sainsbury (J) percentage return for 2012 – basic return is 13.93% – total return is 20.07%
For Total Return Sainsburys in 2012 : (13989.18 – 11651.27)/11651.27 = 0.200657 [ 20.07% to two significant digits]
You can get Datastream to calculate this directly using the formula PCH#(SBRY(RI),1Y) for 31/12/2012 – see previous post Total shareholder return (July 2011)
Bloomberg Professional‘s Total Return Analysis (TRA) function provides a number of additional features – for example whether the share dividends are reinvested in Sainsbury’s shares or reinvested for a fixed percentage return.
Related post – Total Return on Bloomberg (December 2013)
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5 December 2013 at 9:37 pmTotal Return on Bloomberg | Business Research Plus
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17 March 2014 at 3:37 pmTotal shareholder return (share price return) | Business Research Plus
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30 April 2014 at 1:08 pmMarket Return (Datastream) | Business Research Plus