Holding Period Return

The amount of return from a particular investment thus far.  Calculated as a percentage in a per dollar basis, it is difficult to use this to compare to other investments since it is not on a per time basis.

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

where t = number of years.

Returns for regular time periods such as quarters or years can be converted to a holding period return through the following formula:

(1 + HPR) = (1 + r₁) x (1 + r₂) x (1 + r₃) x (1 + r₄)  where r₁, r₂, r₃ and r₄ are periodic returns.

Thus, HPR = [(1 + r₁) x (1 + r₂) x (1 + r₃) x (1 + r₄)] – 1

*Equation courtesy of Investopedia.com