Gross Rate of Return
Gross rate of return measures performance before specified fees. Learn gross, pure-gross, transaction-cost, net-return, and disclosure distinctions.
Distinguish simple holding-period return from gross-of-fees, pure-gross, and net-of-fees investment performance.
Return calculations have two separate dimensions: method describes how performance is calculated, while fee basis describes which costs are deducted. A return can be simple and gross, simple and net, or compounded and net.
| Guide | Use it for |
|---|---|
| Simple Rate of Return | Calculating an uncompounded gain or loss relative to beginning value for one stated holding period. |
| Gross Rate of Return | Identifying performance before specified fees and distinguishing gross-of-fees from pure-gross conventions. |
| Net Return | Measuring performance after the fees and expenses explicitly included by the methodology. |
Before comparing two figures, align:
The words “gross” and “net” do not identify every included cost. Historical return is not a forecast, guarantee, or personalized investment recommendation.
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Gross rate of return measures performance before specified fees. Learn gross, pure-gross, transaction-cost, net-return, and disclosure distinctions.
Net return is investment performance after specified fees and expenses. Learn the formula, fee bridge, fund conventions, tax distinction, and limits.
Simple rate of return measures gain or loss relative to beginning value without annualizing. Learn the formula, examples, comparisons, and limitations.