GLOSSARY TERM
Gross Return
Gross return is the return of an investment before fees, costs and taxes are taken away.
What does this mean in practice?
It shows the raw performance of an investment, but not the amount you actually keep. This is why gross return can look better than your real result as an investor. To understand what truly matters, it should be compared with net return, which is closer to your real outcome after costs.
Example
A fund returns 8% in a year before costs. That 8% is the gross return. But if fees and taxes reduce the result, the amount you actually keep will be lower than 8%.
Why it matters
Gross return helps you understand the starting point of performance, but it also shows why headline numbers should be viewed carefully. Over many years, the difference between gross return and what you actually keep can become meaningful.
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