Rolling Returns

Generally, when comparing investment funds, you'll typically use annual returns. So...a fund had a gain of 12% in 2017, a decline of 3% in 2018, and a gain of 9% in 2019. Something like that.

Annual returns are decided on a January-1-to-December-31 basis...a calendar year. Of course, this is somewhat arbitrary. It might not seem arbitrary at first glance...but that's only because we're used to thinking of the calendar turning over at New Year's. But how much would the annual returns change if you looked at February 1 to January 31? Or March 1 to February 28?

Those questions define the purpose of a rolling return. They take out the arbitrary restraints of an annual return and look at it more holistically.