Portfolio Return Calculator
A Portfolio's Return Isn't the Average of Its Holdings
If half your money returns 10% and half returns 0%, your overall return isn't automatically 5% — it's a weighted average, and the weights matter as much as the individual returns. A portfolio heavily concentrated in its best performer behaves very differently from one spread evenly, even with identical component returns.
The Formula
Each asset's return is multiplied by its share of the total portfolio (its weight), and the results are summed. Weights entered as raw amounts (like dollar values) are automatically normalized to percentages that sum to 100% before the calculation runs.
Where This Applies
- Multi-asset portfolios — stocks, bonds, and cash held together, each contributing a different return at a different weight.
- Rebalancing decisions — seeing how shifting weights between holdings would have changed historical portfolio performance.
- Performance attribution — identifying which holdings contributed most to overall return, not just which had the highest individual return.
Worked Example
A three-asset portfolio: 50% weight at 8% return, 30% weight at 5% return, 20% weight at 12% return.
| Asset | Weight | Return | Contribution |
|---|---|---|---|
| Asset 1 | 50% | 8% | 4.0% |
| Asset 2 | 30% | 5% | 1.5% |
| Asset 3 | 20% | 12% | 2.4% |
| Portfolio Return | 7.9% | ||
7.9% falls between the lowest (5%) and highest (12%) individual returns, pulled closer to whichever asset carries the most weight.
How to Use This Calculator
- Enter Asset Weights as a comma-separated list (e.g. 40,30,30) — these can be percentages or any proportional values.
- Enter the matching Asset Returns (%) in the same order, comma-separated.
- Select Calculate to see each asset's normalized weight, its contribution, and the overall portfolio return.
Related Calculations
Weighing hypothetical scenarios instead of fixed holdings? Try the Expected Return Calculator, or check the portfolio's volatility with the Portfolio Standard Deviation Calculator.