Cumulative Return

If the standard return over one period is R1 and the standard return over a second period is R2 then the cumulative return over both periods, Rc, is (1 + R1)(1 + R2) – 1 = Rc. The cumulative return is sometimes referred to as the total return.

The cumulative return as defined here is not additive across subportfolios, but there are methods for calculating additive cumulative returns. See Additive Profit Calculation.

For the standard return calculation, see financial return.