Your personal rate of return is determined using the total value of all of your investments, less the initial amount you paid for them and any fees you paid over a specific period of time, usually annually. You can ask your adviser to calculate your return for you, or you can calculate it yourself using a financial calculator or spreadsheet software. Follow the steps on how to calculate your personal rate of return on GetSmarterAboutMoney.ca.
As part of the new cost and performance rules, you will soon begin to receive an annual performance report using standard formulas explaining how your investments have performed over time. The money-weighted rate of return was chosen as the standard method because it is your personal rate of return, factoring in the impact of deposits and withdrawals from your account – and the dates of these transactions. This method of return is ideal for helping you determine whether you are progressing towards your goals. Learn more about the new report on investment performance.