Please explain the difference between of the Annualized ROR and the Total Annualized ROR. Also, the value of the RORs change depending on the period of analysis that the user indicates, so the selection of the base year is very important. (10/15/2013)
The Annualized ROR calculation represents the capital appreciation component only. In other words, it calculates the return from the price on the first day of the time period being measured to the closing price on the last day. If you look to the top of the performance graph, you will see the details. So more simply stated, this is measuring the price increase over the time period only.
The Total Annualized ROR includes total cumulative dividends, if any, that were paid for the time period. Note that the dividends are assumed paid and not reinvested. Therefore, the total annualized rate of return includes total capital appreciation plus dividend income.
Note: These Annualized ROR items are only separated out when reinvesting dividends has not been selected.
Regarding the rate of returns value changing, different time periods are going to show different results. A lot of factors come into play here; beginning and ending valuation, the total amount of dividends paid, etc.
Finally, these factors are expressed in both total dollars (Investment plus Appreciation and Total Investment plus Appreciation plus Dividends) as well as percentages. Therefore, the Total Annualized ROR will be higher than the Annualized ROR, if dividends are paid.