2. Different indicators mean different things. Find out how returns are calculated for a better understanding of fund performances
You may notice that on your Annual Benefit Statement, fund performance is calculated in several ways:
- Calendar Year Return – This is the one-year return that captures a fund’s performance from the beginning of the year (1 January) to the end of the same year (31 December)
- Cumulative Return – This is the fund’s return over a period of time. In general, a fund fact sheet will include the 3-year, 5-year, and 10-year period
- Annualised Return – This is the fund’s return over a period of time, but expressed as an annualized result, with investment period, compounding effect, and cumulative return all taken into account.
The above mainly reflect the fund’s returns over a specific period of time as a lump-sum investment, and may not fully reflect the actual performance of your provident fund investment. If you are looking for return information on a more personal level, you can refer to returns under dollar-cost-averaging.