Question

You invested in the​ no-load OhYes Mutual Fund one year ago by purchasing 700 shares of the fund at the net asset value of ​$25.46 per share. The fund distributed dividends of ​$2.67 and capital gains of ​$2.12. ​Today, the NAV is ​$27.15. What was your holding period​ return?

Your holding period return was _​%.

​

Answer 1

Solution :

The formula for calculating the holding period return of mutual fund is

= ( Closing NAV + Capital gain per share + Dividend per share – Opening NAV ) / Opening NAV

As per the information given in the question we have:

Closing NAV = $ 27.15   ;    Opening NAV = $ 25.46   ;

Capital gain per share = $ 2.12   ; Dividend per share = $ 2.67   ;

Applying the above values in the formula we have

= ( $ 27.15 + $ 2.12 + $ 2.67 - $ 25.46 ) / $ 25.46

= $ 6.48 / $ 25.46

= 0.254517

= 25.4517 %

= 25.45 % ( when rounded off to two decimal places )

Thus the holding period return was = 25.45 %