Return refers to the profit or loss generated by an investment relative to the capital invested, usually expressed as a percentage.
It can be calculated in different ways: absolute return (total gain or loss), annualized return (average yearly performance), risk-adjusted return (e.g. Sharpe ratio), or net return after costs and taxes.
In wealth management, return is a central performance metric, but it should never be viewed in isolation. A high return combined with high drawdowns or volatility reflects a different quality than a stable, moderate return.
Overall portfolio returns depend heavily on asset allocation, costs, market cycles, and execution discipline.
