**What is your simple return?**

Your simple return shows the overall gain or loss made on your account, and it can be used to measure how your account has performed over time.

### How is your simple return calculated?

Simple return is calculated by dividing your current earnings (your overall gain or loss plus bonuses and rewards minus any fees) by your net contributions (your total contributions minus your total withdrawals).

For example, if you’d invested £1,000 and it grew to £1,100 after a year, your current earnings would be £100. To calculate your simple return, you’d divide your current earnings of £100 by your net contribution of £1,000, which results in a simple return of 10%.

At Moneybox, you can calculate your simple return using the current earnings and net contributions shown on your Breakdown screen.

**Simple return vs time-weighted return**

One of the quirks of simple return is the skewing effect of recent contributions and withdrawals. This means contributing into your account decreases your simple return, and withdrawing from your account increases it.

Using our first example, if you withdrew £500 at the end of the year, you’d now find your simple return to be 20% (calculated by dividing £100 by £500). This doesn’t mean that your investment performance has increased by 10%, it just means the withdrawal reduced the total balance in your account that the increase in value is compared against.

This is why we introduced time-weighted return, which is an alternative way to measure how your account has performed, and it removes the skewing effect.

So if you see ‘n/a’ displayed for your simple return, don’t worry, it just means that your simple return has been heavily skewed by your withdrawals. In this scenario, using time-weighted return might be a more effective way to see how your account has performed.