Unrealised Gains/Loss vs Total Return

ChilliBob

Hey everyone,
I use the FT to track my portfolio, and have been doing so for a couple of months. I have three different portfolios in there. In two cases the percentages for these two different figures are nearly identical, in one case they're quite different. I've been buying only, not selling.. 


                    Unrealised   Total

Pot 1	X GBP		+1,848.86 +2.50%	+1,848.86 +5.59%
Pot 2	X GBP		+316.03 +3.52%	+298.87 +3.73%

The first figures are Unrealised gains/losses the other is total return.

It's somewhat odd the total return is more than double the unrealised gains for the first pot.. The first is the right percentage as far as I'm concerned, just not sure what the second is! 

Any ideas much appreciated! 

Michael121

Makes no sense for total return to be higher unless you realized a gain by selling shares. 

coyrls

My guess is that "Total" is an annualised figure and that you've had Pot 2 for just less than a year and Pot 1 for about 6 months.

ChilliBob

Thanks, both, I've had both pots since early Jan so sadly that doesn't explain it either, most odd! Shame, as I find the rest of the ft.com display and features pretty decent

Albermarle

Is the difference due to dividend income ?

ChilliBob

Nope, the pots too new to have any dividend income unfortunately!

I'm tempted to enter a new portfolio with the same transactions and see what happens

EthicsGradient

You say both "I've been buying only" and "I've had both pots since early Jan". Does that mean you bought everything in both pots in early Jan, or have you added to one or the other since? If the latter, then 'total return' may be worked out on a basis of some money only having been invested for less time.

I'd suggest you look around the FT site for their definitions of 'unrealised gains/losses; and 'total returns', anyway.

ChilliBob

Yeah some money has been invested more recently in the first pot, so some in each month pretty much, vs the other pot mostly in one month (Jan or Feb). Yeah I'll have a look but I couldn't see a definition. Cheers

coyrls

ChilliBob said:

Yeah some money has been invested more recently in the first pot, so some in each month pretty much, vs the other pot mostly in one month (Jan or Feb). Yeah I'll have a look but I couldn't see a definition. Cheers

So, it does look like total return is an annualised figure, based on the annualised return of your current investments but as you haven't held those investments for 12 months, it is showing a higher return than your actual return to date, which is your unrealised gain.

ChilliBob

Thanks, that sort of makes sense, but not why it's the case for the other pots, which are similar - yes they'd not have had investments in say March or April, but would have done in Feb and Jan. Oddness. 

EthicsGradient

The date on which you made later investments can affect the value of an effective rate of return. Consider 2 scenarios:
1: invest £100 on Jan 1st, £50 on Jan 2nd, and look at the value on April 28th - £160. You've more or less had £150 invested all the time, so you'd say the return was roughly £10/£150 = 6.7%.
2: invest £100 on Jan 1st, £50 on April 27th, and look at the value on April 28th - £160. You've more or less had £100 invested all the time, so you'd say the return was roughly £10/£100 = 10%.

But the unrealised gain/loss would be £10 in each case. So if the FT regards "total return" as something that takes into account how much of the money was invested all the way through, it could give different results.