Holding Period Return Calculator
Use this **holding period return calculator** to estimate total and annualized returns—it supports dividends, capital gains, scenario analysis, and portfolio modeling.
🎯 Calculate Your Holding Period Return (HPR)
Input your investment details to quickly determine your total return over a specific holding period, including any income received. You can also calculate the annualized return for comparison.
Results:
- Holding Period Return (HPR): 0.00%
- Annualized Return: N/A%
📈 Components of Your Return
This chart visually breaks down your total return into capital appreciation (or depreciation) and income received.
Summary of Inputs & Results
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📘 What Is HPR? (Holding Period Return Meaning)
The **Holding Period Return (HPR)**, sometimes referred to as **holding period yield calculator** input, represents the total return an investor earns over a specific investment period. It accounts for both the change in the investment's price (capital gain or loss) and any income generated (like dividends or interest) during that time.
The basic formula for HPR is: $(P_1 − P_0 + D_1) \div P_0$
- $P_0$ = Initial Value (Purchase Price)
- $P_1$ = Ending Value (Sale Price)
- $D_1$ = Income/Dividends received during the holding period
🏗️ Holding Period Return Formula CFA
In the CFA (Chartered Financial Analyst) curriculum, the **holding period return formula CFA** is a fundamental concept. It is taught precisely as: $HPR = (P_1 − P_0 + D_1) / P_0$. This formula forms the basis for understanding and calculating investment performance, and it is a prerequisite for more advanced return measures such as time-weighted and money-weighted returns.
📈 Annualization & Portfolio Scenario Analysis
While HPR gives the total return for the exact period held, **annualization** allows for comparison across investments with different holding durations. The formula to annualize HPR is:
Annualized Return = $(1 + HPR)^{(365/\text{holding days})} − 1$
For **portfolio scenario analysis**, the HPR can be calculated for various individual assets within a portfolio over different periods. These individual returns can then be chained together using compounding to assess the overall portfolio performance under various market conditions or investment strategies. While this calculator focuses on a single investment, the principles apply to each component of a larger portfolio.
🔄 Benefit of Using HPR for Funds (HPR Benefit Funds)
The **hpr benefit funds** method is widely used by investors and financial analysts to effectively compare the performance of different investment funds or portfolios. By consistently applying the HPR calculation, it allows for a standardized evaluation that combines both capital gains (or losses) and any distributions (like dividends or interest) for a comprehensive total return assessment, regardless of the fund's specific investment strategy or distribution frequency.
📊 Comparison: Holding Period Rate of Return vs Yield
The terms "**holding period return**" and "**holding period yield**" are often used interchangeably in finance. While "return" generally refers to the total gain or loss from an investment, "yield" might sometimes imply a greater focus on the income component (dividends, interest) generated over the holding period. However, in practice, this tool serves as both a **holding period return calculator** and a **holding period yield calculator** as it encompasses all forms of gains (capital and income) over the specified holding period.
💡 Frequently Asked Questions
A: If no income or dividends ($D_1$) were received, you simply enter 0 for that field. The HPR formula then reduces to calculating only the capital gain yield: $(P_1 - P_0) \div P_0$. For example, if you purchased an asset at $960 and sold it at $995 with no dividends, the HPR would be approximately 3.6%.
A: Yes, HPR can certainly be negative. This occurs if the ending value of your investment ($P_1$) plus any income received ($D_1$) is less than your initial investment ($P_0$). A negative HPR indicates a net loss over your holding period.
A: Holding Period Return is a flexible measure applicable to any investment over any duration, making it practical for shorter horizons or when an investment is sold before its full term. Yield to Maturity (YTM), on the other hand, is a specific bond yield calculation that assumes the bond is held until its maturity date and all interest payments are reinvested at the same rate. They serve different analytical purposes in finance.