Calculation Methodology

Version 1.0 · Last updated: October 2026

RealReturn calculates real, inflation-adjusted returns and compares them against benchmarks. This page explains exactly how.

1. Nominal return

The nominal return is calculated as the percentage change from the purchase value to the current value in the same currency:

Where Cost basis = quantity × purchase price and Current value = quantity × current price.

For positions denominated in a foreign currency, both the price change and the exchange-rate change contribute to the nominal return in the user's base currency.

2. Real (inflation-adjusted) return

We apply the Fisher equation to convert a nominal return to a real return:

The inflation used is the cumulative CPI for the position's currency over the exact holding period — not the latest annual rate scaled by days. The currency of each position determines which price index is used: TRY positions use actual month-by-month TÜFE data chained from the purchase date to today (sourced from TCMB/TÜİK via proxy). For USD, EUR, and GBP positions, the World Bank annual CPI rate (WDI: FP.CPI.TOTL.ZG) is used; it is distributed proportionally across the holding period. Annual-rate results for non-TRY currencies are approximate and are flagged with "~" in the UI. This matters especially for long holding periods in high-inflation environments, where a single annual rate extrapolated backwards can diverge significantly from actual cumulative inflation.

Where CPI data is not yet available for the most recent period (publication lag typically ranges from a few weeks to a few months for monthly series, up to a year for annual series), the gap is filled by extrapolating with the latest known rate. These estimates are flagged with "~" in the UI. Where no CPI data exists at all, the UI shows "—" rather than silently using a fallback.

When a portfolio contains positions in multiple currencies, each position's nominal return is first converted to the user's base currency (using the purchase-date FX rate stored at entry and today's live rate), then deflated with the base currency's cumulative inflation. The aggregate real return is the cost-weighted average of these per-position real returns in base currency. The dashboard shows "—" only when FX or inflation data are missing for the entire portfolio.

Inflation data coverage by base currency:

Inflation series selection rule: The series used is determined by the user's base currency and country. For EUR-base users in a eurozone country (e.g. Germany, France, Finland), that country's own Eurostat HICP series is used rather than the Euro area aggregate. For EUR-base users whose country is not a eurozone member, the Euro area (EA) HICP is used as the representative series. The label in the UI always reflects the actual series: "Germany HICP", "France HICP", "Euro area HICP", etc. — not a generic label.

"Annual (~)" means the year-by-year rate is interpolated using the holding-period formula; results are marked "~" in the UI when the approximation spans more than a few months.

A positive real return means the investment grew faster than inflation — purchasing power increased. A negative real return means inflation eroded the gains.

3. Currency adjustment

When an asset is priced in a currency different from the user's base currency, we convert using the exchange rate at the time of purchase and at the current date. The real return is then calculated in the base currency, so both price appreciation and currency fluctuations are reflected.

The same principle applies to benchmark comparisons: the benchmark is converted to the position's currency before the return is computed. A benchmark's currency is read from the Yahoo Finance meta.currency field — it is never inferred from the ticker symbol. When benchmark currency equals position currency, no conversion is applied.

4. Benchmark comparison

RealReturn supports several benchmarks. For each position, the benchmark is calculated as if the same amount had been invested in the chosen benchmark on the purchase date. Multiple purchases of the same asset, partial sales and closed positions are not yet modelled.

The benchmark return is always expressed in the position's currency before comparison. For example, S&P 500 (USD) vs. a TRY position uses the USD/TRY rate at purchase date and current date; a BIST100 (TRY) benchmark vs. a USD position divides by the USD/TRY rate. If the required exchange rate is unavailable, the benchmark card shows "—" rather than using the raw price silently.

Available benchmarks:

• Savings rate / deposit (TR): Only shown for TRY-denominated positions. The benchmark compounds the indicative TRY deposit rate (currently ~45%/yr, based on the TCMB policy rate) over the holding period using the formula (1 + r)^days/365 − 1. The effective rate is shown on the benchmark card. It is not shown for foreign-currency positions because a TRY deposit rate applied to a USD position would be meaningless — the currencies are incompatible.
• Gram Gold / Gram Silver (TR/USD): For TRY positions, uses the TRY spot price per gram (COMEX futures × USD/TRY rate at the purchase date). For USD positions, uses the USD spot price per gram directly from the metals price feed. Shown as "—" for positions in other currencies.
• S&P 500 / stock index: The index level on the purchase date vs. today (or the closest available trading day), converted to position currency via Yahoo Finance FX rates.
• Gold (global): COMEX GC=F (USD/troy oz) converted to position currency at purchase date and current date.
• Custom benchmark: Any Yahoo Finance symbol can be used. Its currency is read from the Yahoo Finance meta.currency field (never inferred from the ticker symbol); if the field is missing, the card shows "Benchmark currency unknown" rather than assuming a currency silently.

The benchmark return is then inflation-adjusted using the same Fisher equation so comparisons are apples-to-apples.

Inflation data accuracy note: For Turkey, monthly TÜFE series from TÜİK/TCMB (via OECD) are used; the last few weeks before the publication date are estimated with the most recent annual rate. For all other countries, the source is World Bank WDI (FP.CPI.TOTL.ZG) — annual averages for past years, with the current year extrapolated using the last published rate. WDI is typically 1–2 years delayed; the "est." marker appears when recent periods rely on extrapolation. MSCI World is proxied by URTH ETF on Yahoo Finance (adjusted close, dividends reinvested, USD-denominated; converted to the base currency via FX).

5. Opportunity cost

The opportunity cost (or gain) is the difference between what the benchmark would have returned and what the user's investment actually returned, expressed in the base currency:

A positive number means you "missed" this amount by choosing your investment over the benchmark. A negative number means you beat the benchmark.

6. Data sources

All data is provided for informational purposes only. Prices may be delayed or inaccurate. Past data is not guaranteed to be complete. See our Terms of Use.

7. Rounding and precision

Monetary values are displayed rounded to 2 decimal places in the UI. Internal calculations use full floating-point precision. Returns are shown as percentages rounded to 2 decimal places.

8. Limitations

• The inflation figure is the World Bank's latest available annual rate; this data can lag by up to one year.
• Dividend income and interest payments are not included in price-based return calculations unless entered manually as cash flows. Taxes and withholding are not deducted.
• Bid-ask spreads, transaction costs and slippage are not modelled.
• Deposit rates used are indicative and may differ from the rate actually received.
• Total return is calculated on cost basis and is not annualised; TWR and XIRR are not yet available.
• Only open positions are included; realised gains/losses from closed positions are not reflected.
• Where monthly CPI data is unavailable for the most recent months (publication lag), the gap is filled by extrapolating with the latest annual rate. These estimates are marked with "~" in the UI.