Continuation of S&P 500 vanguard question and how to understand gains

Hello,

Can you please clarify the returns which of these ways should I be calculating?

If you look at the chart displayed in the previous question about S&P 500 and see 322% gain since 2014 let’s say 7 years.
Is it 322/7 = 46% yearly return
or should it be 222/7=31% yearly return (taking out initial 100% not sure which is right)

https://www.vanguardcanada.ca/advisors/mvc/loadImage?country=CAN&docId=550

If I look at this fund sheet it doesn’t have a 7 year return but for 5 years it shows is that 16%. Is that a year? or total over 5 years?

I don’t understand the return of these funds that is why I stopped using them.

Can you please clarify which of these options is correct or maybe it is a completely different way to understand?

Thanks!

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Asked on June 9, 2021 9:26 am

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Thank you

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Posted by Dan Kent

Answered on June 10, 2021 8:29 am

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I've attached an easier chart to look at that should provide you with the answer you need. $10,000 invested into VFV since 2014 is $42,380. So, the % gain in the previous chart does NOT include your initial capital.

That fund chart is going to show annualized returns. Over the last 5 years, $10k in VFV now looks like $20,970, for a compound annual growth rate of around 16%, or what you see in that fund document.

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Posted by Dan Kent

Answered on June 9, 2021 11:01 am

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