From the beginning NAV at the beginning of a year, the total return to the mutual fund investor is:

Question

Quizplus · Accepted Answer

The total return to a mutual fund investor is calculated by adding both the capital gains distribution and income distribution to the gain in NAV, and then dividing this total by the beginning NAV. This approach accounts for all forms of returns the investor receives: distributions (income and capital gains) and the appreciation in the value of the fund (gain in NAV).

From the Beginning NAV at the Beginning of a Year