For instance, if I paid $1,000 for a security on 1/1/2000 and it is worth $1,100 on 12/31/08, that is a 10% change but the Apprec % on the report is 1.1%. If you compound 1.1% continually for 8 years, you get 10%. It doesn’t matter if the 10% gain was in one month or spread over the 8 year period.

Or if the 10% gain was in a single month, you bought the security in that month, and the report was for a single month, the Apprec % would be 219.1%. Note that GIPS does not recognize gains to be annualized for investments help less than a year, so this number, while mathematically correct, is not meaningful. Navigator ROI leaves similar numbers out of reports when the period is less than a year.

See page 368 of the Navigator 8.2 Reference Guide or Search for “Apprec” on Navigator 8.2 help for the formula that Navigator uses.

Navigator ROI looks at the investment for the period being reported on, not since purchase. So a Navigator ROI report for the 12 month period that includes the 10% would show a 10% compounded time-weighted return as you might expect. This is simply the gain divided by the beginning balance. Navigator ROI also shows a annualized time-weighted return of 9.5% which is the return (before compounding) which when compounded daily yields a 10% gain. Note that ROI uses daily compounding whereas Security Portfolio Analysis reports use continuous compounding.

Navigator ROI also reports a 10% IRR (dollar-weighted return) and a 10% annualized IRR for a one-year period. For a two year period, the annualized IRR is 4.9%.