Grand Total returns

Hopefully there’s some pearls of wisdom out there in relation to this query!

In theory, the capital gain for a particular stock should be (Closing Value - Opening Value) - Purchases + Sales. To work it out as a percentage, you would divide that gain by the capital you had invested in the stock. Sharesight seems to define the denominator as (Opening Value + Purchases). I think in theory, it should be Opening Value + Purchases - Sales, but you might end up with a silly result like -100% if you had made a full sell down. I have tested out this theory on my portfolio, over 60+ monthly periods, and stock-by-stock this is how Sharesight has calculated the capital gain %. And it seems right to me.

But…if I apply this approach not to an individual stock, but to my whole portfolio, it doesn’t work. The capital gain % reported on the ‘Grand Total’ line is worked out differently. I think it’s using a different approach for the denominator. Rather than using the grand total (Opening Value + Purchases), it’s doing (Opening Value + Purchases - Sales + Add back Sales in respect of any fully sold down security). But then, in some months, it does that and in other months it doesn’t.

Which is frustrating, as my overall portfolio % return is more important to me than whether Telstra under performed BHP!

Is there a document anywhere explaining how this is all calculated?

1 Like

Hi @apbullock welcome to the community! :wave:

So there are a few different ways capital gain can be calculated in Sharesight, for Australian users (and the requirements for CGT), based on the sale allocation method you choose to use for each stock. Using the CGT report in Sharesight, you can see the sale allocation method used, the methods are outlined in the below article:

You mentioned monthly date ranges, can you elaborate further on the settings you’re using to view the gain and which reports (if you’re using reports)?

Hi, just to clarify when I say ‘capital gain’ I’m referring to the capital gain line on the performance report. So that is the movement in the capital value of a stock.

With multiple time periods, it doesn’t seem to add up. Here’s an example using the total return for each month per the performance report:

July 0.89%
August 3.31%
September -1.57%
October 1.59%
November 1.20%
December -0.01%

So that’s 6 monthly returns. The return for the whole period should be 5.46% if you compound each of the above monthly returns. But the performance report is saying the return for the 6 month period is 5.31%.

@apbullock So the performance report will show figures based on the price movement from the start date to the end date. So with the 6-month figure it’ll show the gain from the price at the start to the end, rather than a cumulative month-by-month gain.

If you want to compare multiple periods, our Multi-Period Report works really well for this:

Is the report including closed positions? Or just looking at unrealised gains?