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Investment Return Calculator (ROI & CAGR)

Work out the annualised return on your portfolio, including regular contributions (pound-cost averaging). Built for long-term investing with monthly top-ups.

Monthly contributions Annualised CAGR

Your investment details

How much you put in at the start
What your investment is worth now
Investment period
Additional contributions (optional)
Extra money you paid in after the initial investment
Dividends/Withdrawals (optional)
Dividends received or cash withdrawn

Total return

+25.00%
Over 3 years
Total invested£10,000
Current value£12,500
Profit/Loss+£2,500
Annualised return+7.72%

Note: The annualised return (CAGR) lets you compare investments held over different lengths of time.

How to read your investment figures

Understand each field of the calculator to get the most accurate result

Capital invested

Your initial investment

The money you put into the investment when you bought in. It is the base for working out ROI and CAGR. Include the purchase price before charges or tax, unless you specifically want to calculate the net return.

Example
You bought 50 units of a fund at £200 each → initial investment of £10,000

Current value

Today's valuation

The current market value of your holding. The difference from the capital invested is your capital gain (if higher) or your unrealised loss (if lower). This value is not taxed until you sell or cash in.

Example
Those 50 units are now worth £260 each → current value £13,000 → gain of £3,000 (30%)

Dividends and income

Income generated

The income received over the life of the investment: share dividends, bond coupons, rental income. It forms part of your total return and must be added in to get the full return on investment.

Example
2 years of dividends at £300/year = £600 → total ROI = (3,000 + 600) / 10,000 × 100 = 36%

Time horizon

Length of the investment

How long you have been (or will be) invested. It is essential for working out the CAGR (the equivalent annualised return), which lets you compare investments of different lengths with a single comparable figure.

Example
A 36% ROI over 2 years = a CAGR of 16.6%. The same ROI over 5 years = a CAGR of 6.4%

Total return vs price return

Total return includes dividends. Accumulation funds reinvest dividends automatically; income (distributing) funds pay them out as cash. To compare different products fairly, always use the total return.

Adjust for inflation

A nominal return of 5% with inflation at 3% is only 2% in real terms. The real return is what matters for keeping and improving your standard of living. Every point of inflation quietly erodes your wealth.

Benchmarking against the market

Always compare your return with a benchmark index (MSCI World, FTSE All-Share, etc.). If you don't consistently beat the market, low-cost index funds are probably the better option.

How to calculate the return on an investment

The return on an investment measures the performance you have achieved, expressing the profit or loss as a percentage of the capital invested. This calculator helps you work out both the total return (ROI) and the annualised return (CAGR), two essential metrics for judging how well your investments have done.

Knowing your real return lets you compare different investments, judge whether you are beating inflation and make better financial decisions. The concept of return on investment (ROI) is explained in detail on Wikipedia. For guidance on investing safely in the UK, the FCA's consumer hub and the government-backed MoneyHelper service are free, impartial resources.

ROI: total return

ROI (Return on Investment) measures the total performance of your investment without taking time into account. It is useful for seeing how much you have gained or lost in absolute terms.

ROI = ((Final value − Initial investment) / Initial investment) × 100

Example: (12,500 − 10,000) / 10,000 × 100 = 25% total return

CAGR: annualised return

The CAGR (Compound Annual Growth Rate) tells you the average annual growth of your investment. It is the most useful metric for comparing investments held over different lengths of time.

CAGR = ((Final value / Initial investment)^(1/years) − 1) × 100

Example: (12,500 / 10,000)^(1/3) − 1 × 100 = 7.72% per year

Worked example: an S&P 500 index fund

Initial investment

£10,000

Current value (5 years)

£15,385

Profit

+£5,385

ROI (total)

+53.85%

CAGR (per year)

+9.00%

Historical returns for reference

To judge whether your investment has done well, it helps to compare it against the historical returns of the main asset classes:

Asset class Historical annual return Risk level Recommended horizon
Global equities (MSCI World) ~8-10% per year High 10+ years
UK equities (FTSE All-Share) ~5-7% per year High 10+ years
Fixed income (government gilts) ~2-4% per year Low 2-7 years
Property (rent + capital growth) ~4-7% per year Medium 10+ years
Cash savings (2026) ~3-4% per year None 1-2 years
Gold (safe haven) ~3-5% per year Medium 5+ years
Cryptocurrencies Highly variable Very high Speculative

Nominal return vs real return

The nominal return is the gross percentage you have earned. The real return is the nominal return minus inflation, and it reflects the genuine increase in your purchasing power.

Positive real return

Nominal: +7% per year

Inflation: −3% per year

Real: +4% per year

Negative real return

Nominal: +2% per year (savings account)

Inflation: −3% per year

Real: −1% per year (you lose purchasing power)

Important: idle cash loses value

If you leave your money in an account paying no interest, inflation chips away at its purchasing power every year. With inflation at 3%, £10,000 today would be worth just £7,374 (in real terms) in 10 years' time.

Common mistakes when calculating returns

Forgetting fees and charges

Platform fees, fund charges (the OCF) and dealing costs all reduce your real return. Always factor them into the calculation.

Not allowing for tax

Outside an ISA or pension, capital gains above the annual exempt amount are taxed at 18% or 24% (2025/26). Your after-tax return will be lower.

Comparing different time periods

A 50% ROI over 10 years is not comparable with 30% over 2 years. Always use the CAGR to compare like for like.

Ignoring dividends

If you have received dividends, you must add them to the final value. They are part of your total return.

Tax on investments in the UK

Outside a tax-free wrapper, the gains and income from your investments fall under Capital Gains Tax and dividend tax. The headline figures for 2025/26 are:

  • CGT annual exempt amount (tax-free gains) £3,000
  • CGT — basic-rate taxpayer 18%
  • CGT — higher/additional-rate taxpayer 24%
  • Dividend allowance (tax-free dividends) £500
  • Dividend tax (basic / higher / additional) 8.75% / 33.75% / 39.35%

A full worked example: ROI and CAGR

Suppose you invested £10,000 in an investment fund 3 years ago. Today the fund is worth £14,500 and on top of that you have received £800 in dividends over those 3 years.

Item Value Formula
Capital invested £10,000 Purchase price
Current value £14,500 Market price today
Dividends received £800 Income during the investment
Total profit £5,300 (14,500 + 800) − 10,000
Total ROI 53% 5,300 / 10,000 × 100
CAGR (annualised) 15.3% (15,300/10,000)^(1/3) − 1

Note: Outside a tax-free wrapper, capital gains and dividends are taxed in the UK. For 2025/26: Capital Gains Tax is 18% (basic rate) or 24% (higher/additional rate) on gains above the £3,000 annual exempt amount, while dividends above the £500 allowance are taxed at 8.75%, 33.75% or 39.35%. Holding the same investments inside a Stocks & Shares ISA or a SIPP shelters the gains and income from these taxes entirely.

Tip: MoneyHelper offers free, government-backed guidance for individual investors, including how to compare investment products and check that your provider is authorised by the FCA.

Note: This calculator gives an estimate of your gross return. It does not include fees, tax or inflation. For a complete picture of your real net return, speak to a financial adviser or read the definition of ROI on Wikipedia.

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Frequently asked questions about investment returns

We answer the most common questions about returns and investing

The real return is the nominal return minus the rate of inflation. It is worked out more precisely with the Fisher formula: real return = ((1 + nominal return) / (1 + inflation)) − 1. For example, if an investment returns 8% nominal and inflation is 3%, the real return is roughly 4.85%. This is the figure that really matters, because it reflects the increase in your purchasing power. If your investment doesn't beat inflation, you are losing money in real terms.
The absolute return (ROI) measures the percentage gain or loss on the capital invested, without taking time into account: if you invest £10,000 and end up with £15,000, the ROI is 50%. The annualised return (CAGR) expresses that same result as an equivalent annual growth rate, letting you compare investments of different lengths. In the example above, if it took 6 years, the CAGR is 6.99% per year. CAGR is the most useful metric for comparing investments objectively.
The FTSE 100 and the broader FTSE All-Share have historically delivered a nominal return of roughly 5-7% per year over the long term (including dividends), somewhat below global indices such as the S&P 500 (~10%) or the MSCI World (~8%). That said, UK shares are known for their relatively high dividend yield (3-5%), which makes them attractive for income strategies. To diversify and reduce the risk of being concentrated in one market, global index funds are usually the more recommended option.
For portfolios with regular contributions, the most accurate method is the time-weighted return (TWR), which strips out the effect of deposits and withdrawals, or the money-weighted return (MWR), equivalent to the internal rate of return (IRR), which does take the timing of contributions into account. For simple calculations without additional contributions, the ROI or CAGR that this tool works out are perfectly sufficient.
Ranked from highest to lowest historical return (and highest to lowest risk): individual shares (unlimited potential, high risk), equity funds/index trackers and ETFs (7-10% per year historically, moderate-to-high risk), multi-asset funds (4-7%), bond funds (2-4%), fixed-term savings and Premium Bonds/gilts (3-4% in 2026), and easy-access savings accounts (2-3%). To maximise risk-adjusted return over the long term, low-cost global index funds — ideally held inside a Stocks & Shares ISA — are the most proven option.
Outside a tax-free wrapper, capital gains are subject to Capital Gains Tax: for 2025/26, gains above the £3,000 annual exempt amount are taxed at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers. Dividends above the £500 dividend allowance are taxed at 8.75%, 33.75% or 39.35% depending on your tax band. Holding your investments inside a Stocks & Shares ISA (up to £20,000 a year) or a pension/SIPP shelters all gains and income from these taxes, which is why they should usually be your first port of call.