The year-to-date statistic is a widely watched metric because it indicates how an investment or market has performed recently. The figure is relatively easy to compute, and for those that do not want to calculate the number by hand, it is also available in a number of investment publications. In addition, YTD returns can be applied to various benchmarks as a convenient way to compare an investment's return against the performance of the overall market.
What Is a Benchmark?
Benchmarks are market barometers used to track the performance of a group of securities and these gauges are used to analyze market performance. The S&P 500 index is one of the more popular benchmarks for the performance of the U.S. stock market, as it includes 500 companies and represents about 80% of the total market capitalization of all U.S. equities. The Dow Jones Industrial Average, the Russell 2000 Index, Nasdaq Composite, MSCI World Index, FTSE100, and Nikkei 225 are among the more widely followed benchmarks as well.
Key Takeaways
- A benchmark is an index that tracks the performance of a group of securities.
- Year-to-date returns measure the gains or losses of an investment, benchmark, or portfolio throughout the calendar year.
- Yahoo Finance and Google Finance offer YTD performance stats.
- Other sources of year-to-data include Morningstar, Vanguard, and The Wall Street Journal.
Bond indexes are usually created by large fixed-income broker-dealers such as Barclays, Bank of America Merrill Lynch, and JP Morgan. The number of bond benchmarks vary by issuer type, maturity, yield, geography, and tax status. The benchmark will consider both the income from any interest payments made to bondholders as well as any changes in the price of the bonds.
Calculating Year-to-Date Performance
Year-to-date (YTD) performance refers to the change in price since the first day of the current year. For example, if a stock ends the previous calendar year trading for $50 per share and is worth $60 at the end of June, the return (assuming the stock paid no dividends) is $10 or 20%. In this case, where the period ends at the end of June, the YTD return will be equal to the six-month return.
Using a year-to-date period sets a common time frame for assessing performance of different securities, including the performance of a stock or bond against a benchmark. YTD is also useful for measuring changes in other data, such as economic indicators, financial performance, or an entire portfolio.
Year-to-date measurement is limited in that trends implied by YTD performance early in the year can be misleading. For example, if one computes the year-to-date performance of a stock on the third trading day of the year, the result will not offer a reliable indication of recent performance because it captures just a few days.
Sources of Year-to-Date Information
Yahoo Finance has a charts section with the option to view price history over various period lengths, including YTD. Yahoo Finance also provides downloadable historical price data for a variety of different investment types. Similar to Yahoo's service, Google Finance also has a price chart function that allows users to select YTD as the observed period for equities and indexes.
Morningstar has its own set of stock indexes for a variety of equity categories based on size, industry, and company maturity. In addition, the markets section of Morningstar's website has a table with YTD performance data for each benchmark index. The Vanguard Group has a benchmark returns page in its website's Investing section. The tables on this page include YTD performance for a variety of equity and bond indexes. Lastly, The Wall Street Journal publishes YTD benchmark data for equities and bonds in its Market Data Center.
