Compound annual total return over three years. A medium-term performance measure that smooths out single-year noise. Above 12% is strong. Strong 3Y returns combined with improving fundamentals is the most bullish signal.
Formula
Description
Compound annual total return (price plus dividends) over three years. A medium-term performance measure that smooths out single-year noise. This is how fund managers are typically measured and is a good indicator of whether management is creating or destroying value.
Interpretation
Above 12% CAGR over three years is strong. Compare to the benchmark. Persistent underperformance relative to peers may indicate structural issues. Strong 3Y returns combined with improving fundamentals is the most bullish combination.
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