Captools/net calculates annualized ROI assuming either 365 or 365 ¼ days/year, depending upon which has been specified in the report specifications.  365 ¼ days is the average days per year, over a four year period, taking into account the extra leap year day.

 

When 365 ¼ days is used for annualization, this means an investment gaining exactly 10% over a 365 day non-leap year will show an ROI of slightly more than 10%, whereas an investment gaining exactly 10% over a 366 day year (leap year) will show an ROI of slightly less than 10% for the year.

 

Mutual funds and money managers often report their performance on a non-annualized basis. To permit comparison with such reports, Captools/net also reports non-annualized "period" ROIs when so specified in the report customization.

 

AIMR/GIPS performance presentation standards (see section on AIMR/GIPS compliance) specify that annualized performance be presented for periods equal to or greater than one year, and period performance results be presented for periods encompassing less than a year.  Captools/net reports which compute performance contain specification controls that allow you to adhere to this requirement. See Performance Reports and AIMR Compliance for more details.  ("AIMR" is a registered service mark of the Association of Investment Management and Research, now the CFA Institute).