MP-PERF-001 · Methodology Policy · Version 1.0 Draft · 21 September 2026
1. Purpose
This policy sets out the convention InvestHAQ applies when calculating and displaying investment performance across fund profiles, comparison tables, performance charts and downloadable reports. The convention follows standard Australian and global financial practice, so every figure on the platform can be compared like for like with figures published by fund managers, research houses and superannuation trustees.
It applies to every product displayed on the platform: listed ETFs, unlisted funds and superannuation options, across both retail and wholesale offerings.
2. The convention
Two rules govern every performance figure displayed on InvestHAQ:
- Rule 1. Periods of less than one year are reported as the cumulative return for the period, the straight line total return. They are never annualised.
- Rule 2. Periods of one year or more are reported as annualised returns, the compound average annual return, and are labelled per annum (p.a.).
At exactly one year the two measures are identical, so the one year figure is both the cumulative and the annualised return.
| Reporting period | Basis | Label |
|---|---|---|
| 1 month | Cumulative | % |
| 3 months | Cumulative | % |
| 6 months | Cumulative | % |
| 1 year | Annualised (equal to cumulative) | % p.a. |
| 3 years | Annualised | % p.a. |
| 5 years | Annualised | % p.a. |
| 10 years | Annualised | % p.a. |
| Since inception | Cumulative under one year; annualised from one year | % or % p.a. |
3. Why returns under one year are not annualised
Annualising a short period projects that result across a full year. A fund that earns 4.00 per cent over six months would show 8.16 per cent if annualised, which implies the second six months will repeat the first. No such implication can be supported by the data.
For this reason the practice is prohibited under the Global Investment Performance Standards (GIPS) of the CFA Institute, which state that returns for periods of less than one year must not be annualised. Australian industry practice follows the same rule through FSC guidance, and ASIC guidance on advertising financial products warns against presenting returns in ways that create unrealistic expectations. Displaying the plain cumulative figure is the only basis that is both accurate and comparable.
4. Why returns of one year or more are annualised
Cumulative returns over different periods cannot be compared directly. A 50 per cent gain over three years and an 85 per cent gain over five years give no immediate sense of which fund performed better. Annualising converts both onto a common per year scale that reflects compounding: 14.47 per cent p.a. and 13.09 per cent p.a. respectively, showing the three year fund actually grew faster.
The annualised return is a geometric, that is compound, average. It is never calculated by dividing the cumulative return by the number of years; that arithmetic shortcut overstates the true rate, as the worked examples show.
5. Calculation method
The return series is built on the following basis:
- Returns are calculated from exit price to exit price (or NAV to NAV) with distributions reinvested.
- Figures are net of management fees and costs and before tax, unless labelled otherwise.
- For listed products, NAV performance is the default basis; market price performance is labelled separately where shown.
- Monthly observed returns are the source series. Cumulative and annualised figures are derived values computed from that series on read; they are never stored as manual overrides.
Cumulative return over n months
R(cum) = [(1 + r1) x (1 + r2) x ... x (1 + rn)] - 1
Annualised return, where n is 12 months or more
R(p.a.) = (1 + R(cum)) ^ (12 / n) - 1
Where daily data is used, the exponent is 365.25 / d, with d the number of days in the period.
6. Since inception returns
- Where a fund has less than one year of history, the since inception figure is the cumulative return and carries the label "since inception, not annualised". No annualised equivalent is displayed anywhere, including charts and tooltips.
- From the first anniversary of the inception date, the since inception figure is annualised and labelled p.a.
- The inception date is the date of the first available unit price after the fund commenced, as disclosed in the offer document or by the manager.
- The basis recorded in the data layer must match the basis displayed on screen. Any mismatch, for example a data file recorded as annualised while the screen shows cumulative, is a blocking data quality issue and the figure is withheld until resolved.
7. Worked examples
| Period | Cumulative return | Displayed figure | Working |
|---|---|---|---|
| 6 months | 4.00% | 4.00% | Under one year, shown as is. (1.04)^2 - 1 = 8.16% is never shown. |
| 18 months | 12.00% | 7.85% p.a. | (1.1200)^(12/18) - 1 |
| 3 years | 33.10% | 10.00% p.a. | (1.3310)^(1/3) - 1 |
| 5 years | 61.05% | 10.00% p.a. | (1.6105)^(1/5) - 1 |
The arithmetic shortcut fails: 33.10 divided by 3 gives 11.03, overstating the true 10.00 per cent p.a. Annualised figures must always be computed geometrically.
8. Display and labelling rules
- Annualised figures always carry the label p.a. Figures for periods under one year never do.
- Every performance table and chart carries the footnote: "Returns for periods of less than one year are cumulative and not annualised. Returns for periods of one year or more are annualised. Past performance is not a reliable indicator of future performance."
- Fund, stated benchmark, peer and ethical peer figures within any comparison are calculated on the identical basis over the identical period. A cumulative fund figure is never placed against an annualised benchmark figure.
- Manager supplied figures are tagged with attribution. Where a manager's stated basis differs from this convention, InvestHAQ recomputes on this convention where the underlying series is available, or displays the manager figure with its basis clearly labelled.
- Figures are displayed to two decimal places.
9. Alignment with industry standards
- Global Investment Performance Standards (GIPS), CFA Institute. Prohibits annualising returns for periods of less than one year.
- FSC Guidance Note No. 46, Investment Option Performance: Calculation of Returns. The Australian industry methodology for calculating total returns, which replaced former FSC Standard No. 6.
- FSC Guidance Note No. 47, Presentation of Past Performance Information and Visual Promotions. Guidance on presenting past performance in promotional material.
- ASIC Regulatory Guide 234, Advertising financial products and services. Good practice guidance against presentations that create unrealistic performance expectations.
- Research house practice. Morningstar, Lonsec and other research houses report trailing returns on this convention, so InvestHAQ figures remain directly comparable.
10. Document control
| Field | Detail |
|---|---|
| Document code | MP-PERF-001 |
| Series | Methodology Policy (MP) |
| Version | 1.0 Draft for review |
| Date | 21 September 2026 |
| Owner | InvestHAQ |
| Applies to | All performance figures displayed on the platform, across listed ETFs, unlisted funds and superannuation options, retail and wholesale. |