Question

What is 'rolling return' and why is it preferred over point-to-point return for performance evaluation?

Accepted Answer

Rolling returns calculate returns over a fixed period (e.g., 3 years) across multiple start dates, showing consistency of performance across market cycles — Rolling returns compute the return for a fixed holding period (e.g., 3-year returns) calculated daily across many start dates. This eliminates start-date bias and reveals how consistently a fund has performed — unlike point-to-point returns which depend heavily on the start and end date chosen.