Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Unannualized

What it is:

Unannualized refers to a rate of return or other measure for a period that is not one year.

How it works (Example):

Let's assume Company XYZ stock rises by 2% in one week. The 2% is an unannualized return -- it's just for the period in question and does not reflect what a person would earn if this performance continued for a full year.

Why it Matters:

Unannualized returns reflect the returns only for a certain period of time, which makes them hard to compare to returns for other securities.

Annualized returns, on the other hand, give investors a way to compare returns. The measure tells investors what the investment would yield in a year if it continued on its current path. Without this and other standardized, required disclosures, investments such as mutual funds or money market funds could manipulate their yield calculations. It is important to note, however, that performance over a specific unannualized period rarely continues for a full year, which makes annualized returns more like estimates and unannualized returns more like the real thing