Page 16 - DCAC November 2023 Files
P. 16
Following a Prudent Due Diligence Process
Understanding Investment Performance
• Absolute vs. Relative Performance
– Absolute Performance is the absolute percentage an investment gained or lost during a specific
timeframe (i.e. one quarter, one year, 5-year average, etc.) net of investment expenses.
– Relative Performance is an investment’s return compared to (relative to) an index or peer group
during a specific timeframe (i.e. one quarter, one year, 5-year average, etc.) net of investment
expenses.
• Short-Term and Long-Term Performance
– Short-Term Performance is the absolute performance for a fund during timeframes less than one year.
– Annualized Performance is the average annualized return of an investment over longer-term
timeframes, such as 1-Year, 3-Year, 10-Year, etc.
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