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how to calculate the total return due to domestic return? and due to foreign exchange gain?

how to calculate the total return due to domestic return? and due to foreign exchange gain?
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Answer #1

Total return includes the effects of foreign exchange on the holdings.

Hence Total Return due to domestic return will be :

Total Return - Forex gain / loss = Domestic Return

For example:

Purchase price : EUR100 (reporting at USD1.1 / EUR)

Actual USD purchase = USD 110

Selling price : EUR 200 (reporting in USD 1.2 / EUR)

Actual USD selling = USD 240

Total return = USD 130

Forex gain or loss = 200 * 0.1 = USD 20

Hence Domestic return = USD 130 - USD 20 = USD 110

  

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