Work out total return and annualized return (CAGR) on an investment, fees and dividend income included.
Total and annualized.
Total ROI tells you how much an investment grew relative to what went into it, full stop — it doesn't care whether that happened in six months or twenty years. Annualized return (CAGR — compound annual growth rate) restates the same gain as a yearly rate, which is what makes it possible to compare investments held for different lengths of time on equal footing.
Total ROI = (Net gain ÷ Total invested) × 100. CAGR = [(Final value ÷ Total invested)^(1/years) − 1] × 100. This tool folds fees into total invested and dividend or other income into final value before running either calculation.
Comparing a 40% two-year return against a 30% five-year return by total percentage alone is misleading — the annualized figures (roughly 18% vs. 5% per year) show the two-year investment actually performed far better on a per-year basis.
Any transaction costs, management fees, or commissions paid to make or hold the investment — they're added to your total invested amount, which lowers both total ROI and CAGR appropriately.
Yes, if you received and kept them — this tool adds any income field to the final value before calculating return, since dividends are part of what you actually earned.
Because returns compound — dividing total ROI by years assumes linear growth, which understates or overstates true annual performance. CAGR correctly accounts for compounding across the holding period.