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A mutual fund had NAV per share of $23.00 on January 1, 2016. On December 31 of the same year, the fund's NAV was $23.15. Income distributions were $0.63, and the fund had capital gain distributions of $1.26. Without considering taxes and transactions costs, what rate of return did an investor receive on the fund last year

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The rate of return did an investor receive on the fund last year is : 8.87%.

Rate of return

Using this formula

Rate of return=(Dec fund's NAV -Jan fund's NAV +Income distribution+Capital gain distribution)/Jan fund's NAV

Let plug in the formula

Rate of return = ($23.15 - $23.00 + $.63 + $1.26)/$23.00

Rate of return =$2.04/$23.00×100

Rate of return = 8.87%

Therefore the rate of return did an investor receive on the fund last year is : 8.87%.

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