17/08/2004 - 22:00

How the TSR is calculated

17/08/2004 - 22:00

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How the TSR is calculated

Total Shareholder Return analysis includes all forms of returns to the shareholder – dividends, franking credits, returns on re-invested dividends and capital gain (or loss) through changes in the underlying share price.

Trudo uses ASX data provided under licence by Aspect Huntley Pty Ltd. The data includes a dilution factor that takes into account such capital changes as share splits or consolidations that produce a change in the observed share price but has no impact on an investor’s aggregate investment.

The Trudo methodology is based on a notional investment and is calculated using a series of half-yearly re-valuations. Limitations in the data and methodology mean that the analysis does not capture actual holding period returns where companies float on the ASX during the survey period. 

In this case, the notional investment is based on the share price as at the conclusion of the half year following floatation.  Accordingly, the calculated TSR does not capture any stag profits (or losses) based on investment at the IPO price, nor the impact of any attaching rights (if any). 

In some cases, particularly smaller cap mining IPOs with free rights, these impacts may be significant over the short term.  However for the majority of companies that are listed over the full survey period these impacts are not relevant and the TSR calculation provides a true holding period return.

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