Point to Point Return

Point-to-Point Return measures how much an investment has gained or lost over a fixed time period. It compares the initial value with the final value without considering fluctuations in between.

This method is simple but may not reflect the consistency or volatility of returns during the period.

Formula

👉 Return (%) = [(Ending Value – Beginning Value) ÷ Beginning Value] × 100

Why Point-to-Point Return Matters

• Easy to calculate
• Useful for quick performance check
• Helps compare investments over a specific period

Limitations

• Ignores interim volatility
• Can be misleading if start/end points are unusual
• Does not show consistency of returns

Point-to-Point vs Rolling Returns

• Point-to-Point: Single period return
• Rolling Returns: Multiple overlapping periods (more reliable)

Example

• Investment value in 2020 = ₹1,00,000
• Value in 2025 = ₹1,50,000

👉 Return = 50% (point-to-point)

"<ul> <li>Investment value in 2020 = ₹1,00,000</li> <li>Value in 2025 = ₹1,50,000</li> </ul> <p >👉 Return = 50% (point-to-point)</p>"