Understand Your Returns

http://www.myiris.com/financial/storyShownew.php?dir=2012/11/12/&fileR=20121112094943715

Source: IRIS (12 November 2012)

For investors, returns are the key indicators of their investment performance. But how many of us really understand the returns and their underlying purpose? In mutual funds, NAV is the basic element used in calculating the returns because it keeps varying from one point of time to other. Thus, the purchase and sale value of investment is derived by multiplying the units purchased with NAV for respective period i.e. purchase date and sale date. For a layman, surplus earned over and above the principal is often termed as returns.