Basic formula:
Return on capital = interest or profit \ capital X 100%%.
The specific calculation should be determined according to the purpose and duration of calculation (such as month, quarter, year or year). If the funds change greatly during the period, it can also be calculated by average or balance.
The return on capital is generally used as a parameter to measure the investment income of funds.
When calculating the rate of return on capital, the fund's income in a certain period is defined as the total income, which is the most basic method to measure the fund's past performance.
There are two sources of total return, one is income return. That is, dividends, bond interest, bank deposit interest and other dividends and interest income obtained by the fund in a certain period of time; The second is the return on capital. Reflect the fluctuation range of stock and bond prices held by the fund. First of all, we should know the net asset value of the fund, which is the basis for calculating the total income. The total return is the net asset value growth rate of unit funds during this period.
Net asset value is the balance of the total market value of fund assets after deducting liabilities at a certain time, which represents the rights and interests of fund holders. The net asset value of a fund unit refers to the net asset value of the fund represented by each fund unit. Net asset value of fund units = (total assets-total liabilities)/total number of fund units, in which total assets refer to all assets owned by the fund, including stocks, bonds, bank deposits and other securities; Total liabilities refer to liabilities arising from fund operation and financing, including expenses payable to others and interest payable on funds. The total number of fund shares refers to the total number of fund shares issued at that time. The process of fair value calculation of fund assets is the valuation of funds, and valuation is the key to calculate the net asset value of unit funds. Because the market prices of stocks, bonds and other assets owned by the fund have changed, the net asset value of the unit fund should be recalculated every trading day. The net value of closed-end funds is published at least once a week, and the net value of open-end funds is published once every trading day.