(YTD, 12-months, 3-, 5-, 10-, 15-years)
Expressed as a percentage, this figure is calculated by taking the change in accumulation unit value (AUV) during the period and dividing by the starting AUV. Morningstar calculates total returns using AUVs rather than net asset values (NAVs) because the AUV reflects the actual returns passed on to an investor. AUV takes into account a subaccount’s fund expense ratio and all insurance expenses.
Benefits
For ease of use, total returns for periods longer than one year are expressed in terms of compounded average annual returns (also known as geometric total returns). As with non-load-adjusted returns, Morningstar annualizes total returns in order to provide the most accurate account of subaccount performance.
Origin
Total return is an in-house calculation, based on either NASDAQ or non-NASDAQ electronic transmissions.
For the Pros
The Formula
Morningstar determines year-to-date, one-, three-, and 12-month, three-, five-, 10-, and 15-year total returns by calculating the increase in the NAV over that period including the reinvestment of distributions.