What is Year to Date (YTD)?
Year to Date (YTD) refers to the period from the beginning of the current year to a specified date before the yearend. In other words, year to date is based on the number of days from the beginning of the calendar year (or fiscal year) up until a specified date. It is commonly used in accounting and finance for financial reporting purposes.
Year to Date: Fiscal Year vs Calendar Year
Therefore, if someone uses YTD while referring to the calendar year, it is the time period between January 1 and the specified date. If someone uses YTD in reference to a fiscal year, it is the time period between a company’s fiscal year start and the specified date.
For example, Company A’s fiscal year starts on January 31. It is now March 30. The YTD with reference to the calendar and fiscal year up until March 30 is as follows:
- Company A Calendar YTD: Period from January 1 to March 30.
- Company A Fiscal YTD: Period from January 31 to March 30.
When the YTD is not used in reference to a calendar or fiscal year, it is safe to assume that the YTD is in reference to the calendar year.
Formula for Year to Date Returns on a Portfolio
The formula for calculating the YTD return on a portfolio with reference to the calendar year is as follows:
Note: The YTD formula can be applied to any situation in which an individual wants to measure the change in value from the beginning of the year to a specified date. For example, instead of calculating the YTD on a portfolio, the formula can be used to calculate the YTD on sales figures, company costs, earnings, stock returns, bond returns, etc.
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Example of Year to Date Portfolio Returns
On January 1, 2018, Colin invests $50,000 in stocks and $200,000 in bonds to form a diversified portfolio. The portfolio allocation is 20% ($50,000/$250,000) in stocks and 80% ($200,000/$250,000) in bonds. After keeping the portfolio for several months, Colin would like to determine the year to date on this portfolio. The value change of stocks and bonds in Colin’s portfolio is provided as follows:
If Colin wants to calculate the year to date return up until the month of August, it would be calculated as follows:
Therefore, by holding the portfolio from January 1 to August, Colin’s year to date return on his portfolio is 8.117%.
The year to date calculation for other months is similar; only the numerator will change. For example, the year to date return up to March will be:
Example of YTD on Stock Returns
Consider a stock whose share price at the beginning of the calendar year was $17.50. On February 9, the company paid out dividends per share of $0.50. The current date is March 15 with a share price of $18.50. Colin would like to calculate his year to date on this stock.
Therefore, the stock generated a year to date return of 8.571%. Note that all gains from holding the stock are included in the year to date calculation.
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