Help Interprating Data

agal

The_Fiddler wrote: »

How did you calculate the 152.3%? I've tried to manipulate the figures, but can't get them to that figure.

It's not calculated by you, it's on the trustnet site. Go here
http://www.trustnet.co.uk/ut/funds/?fund=476
and look at the five year column where you will see the 152.3% figure for this fund.

The_Fiddler_2

agal wrote: »

It's not calculated by you, it's on the trustnet site. Go here
http://www.trustnet.co.uk/ut/funds/?fund=476
and look at the five year column where you will see the 152.3% figure for this fund.

Yes I had realised that , but I assumed there was some correlation between

2002 - minus 10.8% ( so fund lost money probably due to 9/11 in USA), 2003 - 21.5%, 2004 - 21%, 2005 - 27%, 2006 - 27.3%.

and

Over 5 years the fund grew by 152.3%

If not, how is the latter figure calculated and what do the former figures represent?

dunstonh

The first figures are discrete performance (each year in isolation). The second figure is cumulative.

egamar

dunstonh wrote: »

The first figures are discrete performance (each year in isolation). The second figure is cumulative.

These figures aren't "calculated" as such; I mean they are, but they simply represent how the price of the fund has changed over time.

Jem16 said above "if you invested £1000 5 years ago you would now have approximately £2523" That is the same thing as saying the cumulative performance over 5 years is 152.3%.

Why? Because a gain of £1,523 on an investment of £1000 simply IS a gain of 152.3%! That's why I asked if you were comfortable with percentages. 153.2% is that same as 1.532. Multiply £1000 by 1.532 and you have a gain of £1532, add that to your initial investment of £1000 and you have a total of £2532. (E&OE)

Similarly in a hypothetical year when the discrete performance shows a fqall of 10%, on January 1st the fund might have been worth £1000 but on December 31st it was worth only £900 - a loss of £100 on £1000 is a loss of 10%.

Is that helping the penny drop?

jem16

The_Fiddler wrote: »

If not, how is the latter figure calculated and what do the former figures represent?

All to do with the miracle of compounding.

An easy example - let's say you start off with £100 in a fund.

Year 1 it makes 10% = end of year 1 you have £110
Year 2 it makes 10% = end of year 2 you have £121 ( i.e 10% of £110 = £110)
Year 3 it makes 10% = end of year 3 you have £133
Year 4 it makes 10% = end of year 4 you have £146
Year 5 it makes 10% = end of year 5 you have £160

So the discrete performance for each year was 10%. If you simply add those up you would get 50%.

However the cumulative performance (with compounding) of your £100 is 60% as you now have 60% more than you started with as your fund is now worth £160.

Hopefully that helps?

The_Fiddler_2

egamar wrote: »

These figures aren't "calculated" as such; I mean they are, but they simply represent how the price of the fund has changed over time.

Jem16 said above "if you invested £1000 5 years ago you would now have approximately £2523" That is the same thing as saying the cumulative performance over 5 years is 152.3%.

Why? Because a gain of £1,523 on an investment of £1000 simply IS a gain of 152.3%! That's why I asked if you were comfortable with percentages. 153.2% is that same as 1.532. Multiply £1000 by 1.532 and you have a gain of £1532, add that to your initial investment of £1000 and you have a total of £2532. (E&OE)

Similarly in a hypothetical year when the discrete performance shows a fqall of 10%, on January 1st the fund might have been worth £1000 but on December 31st it was worth only £900 - a loss of £100 on £1000 is a loss of 10%.

Is that helping the penny drop?

I can assure you I am comfortable with the maths and I am well aware how the £1523 equates to the 152.3% gain What I can't work out is how the individual years correlate to the 5 year percentage gain.

The_Fiddler_2

jem16 wrote: »

All to do with the miracle of compounding.

An easy example - let's say you start off with £100 in a fund.

Year 1 it makes 10% = end of year 1 you have £110
Year 2 it makes 10% = end of year 2 you have £121 ( i.e 10% of £110 = £110)
Year 3 it makes 10% = end of year 3 you have £133
Year 4 it makes 10% = end of year 4 you have £146
Year 5 it makes 10% = end of year 5 you have £160

So the discrete performance for each year was 10%. If you simply add those up you would get 50%.

However the cumulative performance (with compounding) of your £100 is 60% as you now have 60% more than you started with as your fund is now worth £160.

Hopefully that helps?

That was the calculation I had applied, at least I thought I did, but the figures don't add up

Year 1 it makes -10.8% = end of year 1 you have £892
Year 2 it makes 21.5% = end of year 2 you have £1083.78
Year 3 it makes 21% = end of year 3 you have £1311.37
Year 4 it makes 27% = end of year 4 you have £1665.44
Year 5 it makes 27.3% = end of year 5 you have £2120.11

As you can see the answer is not £2523. Is my arithmentic flawed somewhere?

egamar

Ahem. A good question, now I understand it!

I *think* the issue is one of definition, but I am more than prepared to be corrected.

Cumulative on this table is cumulative to the day the table was calculated (let's say sometime in August 2007*). The discrete year figures are for calendar (?) 2002, 03, 04, 05 and 06.

I think I am correct, as the chart showing the cumulative performance is at 150% or thereabouts towards the end of 2007, but obviously not at Dec31.

I think there are several anomalies like this in figures, but the main purpose of the figures is, I suggest, to compare funds with funds and with benchmarks rather than to give a detailed/duplicated picture of the fund itself.

But you are right to be confused! I must admit I have never bothered to look at the figures at that level of detail, I use them as indicators and guides, as I say, to other funds.

dunstonh

I think I am correct, as the chart showing the cumulative performance is at 150% or thereabouts towards the end of 2007, but obviously not at Dec31.

It depends on your data feed. Mine is updated daily so it is to previous working day (although there is the ability to do it between certain dates as well). Free consumer data doesnt offer that sort of detail and you are unlikely to pay the £5000 a year plus VAT for it so that means you will rely on the free data sources. These typically cut off anything from a few weeks to a few months earlier.

So discrete performance to 25th August 2007 would be a 26th Aug 06 - 25 Aug 07.

That said, depending on the data source, they may show individual years on a calender year basis. i.e. Jan- Dec.

They way they do it will depend will be printed on the screen so you just need to read that.

I think there are several anomalies like this in figures, but the main purpose of the figures is, I suggest, to compare funds with funds and with benchmarks rather than to give a detailed/duplicated picture of the fund itself.

The figures are typically very accurate. My back office software integrates with Financial Express analytics and whilst my back office software just reports percentage differences, the FE analytics shows full fund data and if you use the same period, the percentages come out the same when the retail price of the funds has been used.

It would only differ if the retail charge is altered (either lower or higher).

egamar

I don't disagree with what you're saying although I only skimmed it as I think you're missing the OP's point (as I did for so long) about two different numbers not reconciling. I don't think he cares right now about where the numbers came from, or how up to date or accurate they are. Hopefully he'll be along somewhen to say that I have correctly understood his question this time!

He has 5 years discrete data being calendar years 02, 03, 04, 05 and 06 (which he correctly calculates to be 112%) and he has a cumulative 5yr performance figure declared to be 153%.

He's asking why the two are not the same and I'm saying that the reason the two numbers are not the same is that they are actually not looking at the same period. The cumulative 5yr figure is cumulative to a date other than 31.12.06 - I used August as a suggestion, it could be September, it could be yesterday: but it isn't 31.12.06 and that's why he's unable to reconcile the two sets of numbers - they are not looking at the same period.

It's just a simple case of the OP expecting the 5 discrete years to be years to (say) August 31st every year, and the 5yr cumulative performance also being calculated to that date. I'm sure I've seen figures quoted that way, as you say; but the particular ones he was looking at were calendar years ending 31.12, so they would never reconcile with the 5yr cumulative to (say) August.