How is annualized return expressed?

Annualized return is expressed as a percentage on an annual basis, reflecting the expected return over a year based on the performance of an investment. This metric allows investors to understand how much they can expect to earn from their investment over a full year, regardless of the actual period the investment has been held. By annualizing the return, it enables a standardized comparison between different investments that may have been held for varying lengths of time.

This approach also accounts for compounding effects, providing a clearer picture of investment performance during the year. It helps investors make informed decisions based on the potential yearly performance of their assets, aligning expectations with actual financial goals. An annualized return expressed as a percentage is crucial in investment analysis, as it turns complex financial data into an easily understandable and comparable form.