Holding Period Return

What is Holding Period Return?

Holding Period Return (HPR) is a calculation used to determine the total return an investor receives from holding an asset over a specific period of time. It encompasses all sources of income, including capital gains, dividends, or interest, accumulated over the holding period.

Short Description: A measure of the total return received from holding an asset over a specific period.

• Formula: HPR is calculated as: ((Ending Value - Beginning Value) + Income) / Beginning Value.
• Investment Comparison: HPR allows investors to compare the performance of different investments over the same or differing time spans.
• Performance Measurement: Assists in evaluating the effectiveness of investment strategies by understanding the actual returns generated.

HPR is an essential metric for investors aiming to assess how well their investments are doing and is often adjusted to reflect time-weighted returns when comparing different periods.