Definition
The total return received from holding an asset or portfolio of assets over a period of time during which it was held, generally expressed as a percentage. It is one of the simplest and most important measures of investment performance.
Holding period return/yield is calculated on the basis of total returns (entire gain / loss, which is the sum income and capital gains) from the asset or portfolio – i.e. income plus changes in value divided by the value at the beginning of the period. It is particularly useful for comparing returns between investments held for different periods of time.
Holding Period Return (HPR) and annualized HPR for returns over multiple years can be calculated as follows:
Holding Period Return =
Income + (End of Period Value – Initial Value) / Initial Value
Annualized HPR =
{[(Income + (End of Period Value – Initial Value)] / Initial Value+ 1}1/t – 1
