Holding Period Return Excel Template

Description
The Holding Period Return refers to the total returns over the period of time in which an investment was held. It is normally expressed in percentage of initial investment and is widely used for comparing returns from various investments held for different periods of time. Any extra income from the investment is also captured, apart from helping calculate the growth or decline in value over multiple periods.

Holding Period Return (HPR) = Income + (End of Period Value - Initial Value) / Initial Value

There is also an additional formula that can be used to calculate return over multiple periods from an investment. This is useful for calculating returns over regular intervals which could include annualized or quarterly returns.

Annualized HPR = {[(Income + End of Period Value - Initial)] / Initial Value + 1}1/t-1

Where t = number of years.

Alternatively, returns for regular time intervals can be calculated thus:

(1 + HPR) = (1+r1) x (1+r2) x (1+r3) x (1+r4)

Here, r1, r2, r3, r4 are periodic returns.

It can also be represented thus:

HPR = [(1+r1) x (1+r2) x (1+r3) x … (1+rn)] – 1

Here, r = return per period

n = number of periods

This Excel template is very simple, all you need to do is provide the three inputs of income, end of period value and initial value.