average annual return

average annual return definition - finance
While this term has many different uses, it generally means the annually compounded return that would have been produced for a mutual fund or other investmentÂ’s cumulative total returns if the performance had been constant over the entire period. Average annual return is used to smooth out variations in a fundÂ’s return and is not the same as individual fiscal year results.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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