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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.

DS-FTSE100-ret

FTSE 100 return in 2012 (click to expand)

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)

Sainsburys Total Return Analysis on Bloomberg (click to expand)

Sainsburys Total Return Analysis on Bloomberg (click to expand)

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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