"RATE OF RETURN" displayed under "ACCOUNT VALUE"

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1

Hi,

Could someone please explain exactly how this is calculated? I opened my Trading212 ISA account early last year but ever since the beginning the “rate of return” figure looks overly exaggerated.

If I simply divide the account value the total return value that should give me the rate of return, no? Instead of 20%, the web GUI is displaying a whopping 50%.

Could someone pleas care to explain?

Thanks.

2

If you click on the total return on the main screen it explains how it’s calculated.

3

I know but I fail to understand the practical benefit of this rate over the simpler calculation.

4

Its basic accounting. Its like calculating an internal rate of return based on when money was present and not.

Simple returns are diluted by regular deposits and not a true reflection of how good or bad you are at investing.