Holding Period Return
The total return earned on an investment from purchase to sale, including all income and capital appreciation.
What is HPR?
Holding period return (HPR) measures the total gain or loss on an investment over the exact time it was held, expressed as a percentage of the initial cost. The formula combines both income received (dividends or interest) and price change: HPR = (Ending Value − Beginning Value + Income) ÷ Beginning Value. HPR does not adjust for the length of the holding period, so a 50% return held for 10 years and a 50% return held for 1 year have the same HPR but vastly different annualized performance. To compare investments held for different durations, HPR should be annualized using the compound annual growth rate formula.
Example
An investor buys 100 shares at $40 each ($4,000 total), receives $200 in dividends during the holding period, and sells at $48 per share ($4,800). HPR = ($4,800 − $4,000 + $200) / $4,000 = 25.0%. If held for 2 years, this annualizes to approximately 11.8% CAGR.