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How do we calculate total returns? And, how do Trusts calculate distributable income?

18062018 calculate returns

How do we calculate total returns? And, how do Trusts calculate distributable income?

This article provides investors with an explanation on how total return figures are calculated for the Montgomery Global Fund. Second, we answer the question, “How do Trusts calculate distributable income?”


Importantly it is worth knowing the investment return and distribution calculations are not generated by Montgomery Global Investment Management. Fundhost Limited is the Independent Administrator and Responsible Entity of The Fund and is responsible for the calculations. In turn, Ernst & Young is the Auditor of The Fund.

Investment Return over the three years to 30 June 2018


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Chief Executive Officer of Montgomery Investment Management, David has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Am I missing something here?

    The article states unit price at inception was $1.00. It is now 1.2344.

    Investor 2 that didn’t reinvest distributions started with $100 000 at inception and now has $143 062. How does that reconcile with the change in unit price over the same period?

    • Hi Jason, after 24 months in the Fund, both investors had $121,020 of value. Investor 1 had all this in units in The Fund, and proceeded to make 20.24% in Year 3 (the year to 30/6/18) on this, leaving him/her with $145,511. Of the $121,020, Investor 2 had $108,920 of units in The Fund, and had banked $12,100 from their distribution at 30/6/17. Therefore the 20.24% return in Year 3 was calculated on the $108,920 (not the $121,020). That is Investor 2 made 20.24% (in Year 3) on an investment which was $12,100 lower than Year 1 (as it was banked at 30/6/17). I hope this helps.

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