%% Last Updated: - [[2021-02-13]] %% A compounding rate of return describes the nonlinear change in value of an investment whose marginal gains or losses are reinvested. A rate of return can be "compounded" as part of the nature of the investment asset, such as [[ETF]]s that, by default, reinvest dividends into the same fund; or through manual intervention, such as through a regular portfolio reallocation. ## References - https://www.investopedia.com/terms/c/compoundreturn.asp