what is the holding period return yield 
holding period return is the total return received from holding an asset or portfolio of assets over a period of time known as the holding period it is generally expressed as a percentage and is particularly useful for comparing returns on investments purchased at different periods in time understanding holding period returnholding period return is calculated on the basis of total returns from the asset or portfolio income plus changes in value it is particularly useful for comparing returns between investments held for different periods of time starting on the day after the security s acquisition and continuing until the day of its disposal or sale the holding period determines tax implications for example sarah bought 100 shares of stock on jan 2 2023 when determining her holding period she begins counting on jan 3 2023 the third day of each month after that counts as the start of a new month regardless of how many days each month contains if sarah sold her stock on dec 23 2023 she would realize a short term capital gain or capital loss because her holding period is less than one year if she sells her stock on jan 3 2024 she would realize a long term capital gain or loss because her holding period is more than one year 1calculating holding period returnholding 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 begin aligned textit holding period return qquad frac textit income textit end of period value textit initial value textit initial value end aligned holding period return initial valueincome end of period value initial value returns computed for regular time periods such as quarters or years can be converted to a holding period return as well example of holding period return yieldthe following are some examples of calculating holding period return 1 what is the hpr for an investor who bought a stock a year ago at 50 and received 5 in dividends over the year if the stock is now trading at 60 h p r 5 60 50 50 30 begin aligned hpr frac 5 60 50 50 30 end aligned hpr 505 60 50 30 2 which investment performed better mutual fund x which was held for three years and appreciated from 100 to 150 providing 5 in distributions or mutual fund b which went from 200 to 320 and generated 10 in distributions over four years hpr for fund x 5 150 100 100 55 hpr for fund b 10 320 200 200 65 begin aligned textit hpr for fund x frac 5 150 100 100 55 010pt textit hpr for fund b frac 10 320 200 200 65 end aligned hpr for fund x 1005 150 100 55 hpr for fund b 20010 320 200 65 note fund b had the higher hpr but it was held for four years as opposed to the three years for which fund x was held since the time periods are different this requires annualized hpr to be calculated as shown below 3 calculation of annualized hpr annualized hpr for fund x 0 55 1 1 3 1 15 73 annualized hpr for fund b 0 65 1 1 4 1 13 34 begin aligned textit annualized hpr for fund x qquad 0 55 1 1 3 1 15 73 textit annualized hpr for fund b qquad 0 65 1 1 4 1 13 34 end aligned annualized hpr for fund x 0 55 1 1 3 1 15 73 annualized hpr for fund b 0 65 1 1 4 1 13 34 thus despite having the lower hpr fund x was the superior investment 4 your stock portfolio had the following returns in the four quarters of a given year 8 5 6 4 how did it compare against the benchmark index which had total returns of 12 over the year hpr for your stock portfolio 1 0 08 1 0 05 1 0 06 1 0 04 1 13 1 begin aligned textit hpr for your stock portfolio qquad 1 0 08 times 1 0 05 times 1 0 06 times 1 0 04 qquad quad 1 13 1 end aligned hpr for your stock portfolio 1 0 08 1 0 05 1 0 06 1 0 04 1 13 1 your portfolio therefore outperformed the index by more than a percentage point however the risk of the portfolio should also be compared to that of the index to evaluate if the added return was generated by taking significantly higher risk 