Question 1

How is total return calculated?

Accepted Answer

Total return divides the strategy's final value by the value it started with and subtracts one. $$ {	ext{total return}} = \frac{{	ext{final value}}}{{	ext{starting value}}} - 1 $$ where: the whole-period gain or loss, as a fraction the capital on the last simulated day the capital the backtest began with

Question 2

How does Fincanva handle it?

Accepted Answer

Total return appears as "Total return (%)" in the Performance group of the metrics table, shown to one decimal place and coloured by sign. It is never annualized. The annualized slot beside it holds CAGR when Reinvest profits is on and AAGR when it is off. The by-year metrics table reports the same measure one calendar year at a time, under the header "Annual return (%)". Total return is read off the strategy's capital curve, so which costs and taxes are already deducted follows the run's simulation assumptions. It can be negative, and it does not depend on how much starting capital you chose — it is a ratio.

Question 3

How does total return differ from Total P&L?

Accepted Answer

Total return is a percentage for the whole strategy; Total P&L is a money amount for one symbol or one position. A money column in the Trade History tables was once labelled "Total return" as well; it now carries its own name, so the two figures no longer share one word. Total return answers "by what percentage did this strategy grow or shrink over the run?" and lives in Performance Metrics. Total P&L answers "how much money did this symbol or position make or lose, after costs and including dividends?" and lives in the Trade History tables. The two measure related things at different scopes and in different units, which is why the money column carries its own name: if a figure is in currency it is Total P&L, and if it is a percentage of the strategy's starting value it is total return.

Question 4

What does it look like in practice?

Accepted Answer

A backtest starts with 10,000 and finishes with 14,000. Its total return is 14,000 ÷ 10,000 − 1 = 0.40, displayed as +40.0%. If that run covered four years, the total return is still +40% — the annualized view is CAGR, roughly +8.8% a year. A ten-year run that also ended at 14,000 would read +40% as well, which is exactly why total return on its own never tells you how fast the money grew.