Total return

Total return counts both ways an investment can pay you: the change in its price and any cash it paid out, such as dividends from a stock or interest from a bond.

Say you put $1,000 into shares. Over a year the shares rise in value by $40, and they pay $20 in dividends. Your total gain is $60, which is a total return of 6 percent for that year.

Total return can also be negative: if the price fell by $80 and the investment paid $20, you lost $60 on $1,000, a total return of minus 6 percent. Fund performance figures are calculated on the assumption that dividends and other distributions were reinvested, after the fund's own costs. The headline figure is before the tax you owe and before inflation, which reduces what your money buys.