Listed for the trailing twelve months, return on equity is net income per share divided by the per-share book value of its equity and indicates the percentage profit the company earns for each dollar of equity on the books. Stocks with high returns on equity are generally preferable to those with low returns on equity. Note, however, that return on equity figures can be misleading owing to accounting conventions. Because equity values on a company's balance sheet are based on historic cost accounting, they may bear little resemblance to current market valuations.
Return on equity for a mutual fund represents a weighted median figure such that approximately 50% of the domestic stocks in the portfolio will have a greater ROE and roughly 50% of these domestic stocks will have a lower ROE than the weighted median.
Origin
All ROE figures are calculated in house at the equity level, based on the domestic stocks in the fund’s most recently reported portfolio. Portfolio analytics are calculated when we receive an updated portfolio from the fund company.