Total return, annualised (CAGR) return, and a direct comparison against a benchmark rate — so you know if an investment actually beat the alternative.
Total ROI tells you your overall percentage gain, but it hides how long it took to get there — a 50% return over 20 years is a very different result from a 50% return over 2 years. Annualised ROI (CAGR) converts that total return into a fair "per year" rate, so you can compare investments with completely different holding periods on equal terms.
Total ROI = (Final Value − Total Cost) ÷ Total Cost × 100
Annualised ROI = ((Final Value ÷ Total Cost) ^ (1 ÷ Years) − 1) × 100
£10,000 invested, grown to £15,000 over 3 years. Total ROI is a straightforward 50%. But annualised, that's 14.47% per year — because compounding means a lower yearly rate still adds up to 50% over three years. Compared against a 5% benchmark (a decent savings account), the same £10,000 would have grown to only £11,576 — so this investment outperformed the benchmark by £3,424.