Perf Year
Annual return
💡 What is Perf Year (1-Year Return)?
One-line definition: Perf Year (1-Year Performance, 1-year return) is like a report card that shows "how much you would have earned (or lost) if you had bought this stock exactly one year ago." It expresses the stock's price change over the past 12 months as a percentage (%).
In English, it's called 1-Year Performance, 1Y Return, or Annual Return. In Korean, it's referred to as 1-year return, annual return, or 12-month return.
Perf Year is one of the most widely used period-based returns among investors. To use a metaphor, it's like the "overall grade for the most recent year" on a school report card. A 1-week or 1-month return is too short and contains too much noise, while a 3-year or 5-year return is too long and doesn't reflect recent changes. The 1-year period strikes a good balance between the two and can fully capture a company's earnings cycle (four quarterly results).
It's important to understand the difference from Perf YTD (year-to-date return). Perf YTD uses January 1st of each year as a fixed starting point, so the period length changes depending on when you check it (just a few days in January, but almost a full year in December). Perf Year, on the other hand, always uses "exactly 365 days before today" as its starting point, so it shows a consistent one-year performance. This makes it more suitable for comparing the same time period across different stocks.
For example, as of March 2025, if NVIDIA's (NVDA) Perf Year is +120%, that means if you had bought 10 million KRW worth of NVIDIA in March 2024, it would now be worth 22 million KRW. On the flip side, if Intel's (INTC) Perf Year for the same period is -30%, the same investment would have shrunk to 7 million KRW. With this comparison, you can instantly see the sector trend: "AI semiconductors are rising while legacy semiconductors are falling."
The 1-year return is a key metric when fund managers and investment professionals are evaluated. When someone says, "Over the past year, our fund delivered a return 5%p higher than the S&P 500," they're referring to this 1-year return. Individual investors can also get the fairest assessment of their own investing ability by comparing their portfolio's 1-year return to the S&P 500's 1-year return.
English terms
1-Year Performance, 1Y Return, Annual Return, Trailing 12-Month Return
Korean terms
1-year return, annual return, 12-month return, trailing 1-year change
📅 Comparing Returns Across Different Periods
To understand the meaning of the 1-year return more deeply, it's essential to compare it with returns from other periods, because each period reveals different information.
Perf Week / Perf Month (short-term) vs. Perf Year (1-year)
If Perf Year is +50% but Perf Month is -10%, it means the overall year was great but the stock has been correcting in the past month. This could mean the long-term trend is strong, but it's currently working off a short-term overbought condition, so it might rise again once the correction ends. Conversely, if Perf Year is -20% but Perf Month is +15%, the stock has been sluggish for a year but a strong rebound has just started — possibly an early signal of a trend reversal.
Perf YTD (year-to-date) vs. Perf Year (1-year)
The difference between these two metrics offers interesting insights. If Perf Year is +60% and Perf YTD is +10%, it means most of the gains happened last year and the upward momentum has slowed significantly this year. On the other hand, if Perf Year is +20% and Perf YTD is +25%, the stock was sluggish last year but has surged so far this year. This kind of analysis helps you judge whether momentum is accelerating or decelerating.
Perf Year (1-year) vs. Perf 3Y/5Y (long-term)
Comparing the 1-year return with the 3-year or 5-year return lets you see where the most recent year sits within the company's long-term growth trajectory. If Coca-Cola's (KO) 5-year return is +40% and 1-year return is +8%, it shows steady, stable growth. In contrast, if a stock has a 5-year return of +200% but a 1-year return of -30%, it has been excellent over the long term but has hit recent headwinds.
Perf Year vs. S&P 500 1-year return (benchmark comparison)
The S&P 500's historical annualized return is around 10–12%. If an individual stock's 1-year return is higher than this, it has "outperformed the market"; if lower, it has "underperformed." Consistently beating the market average over the long term is extremely difficult even for professional fund managers, so there's no need to be disappointed if your 1-year return is below the S&P 500's.
📊 How to Interpret It
+100% or more — stock more than doubled in one year
These are stocks that have surged, doubling or more in just one year. The causes are typically a breakthrough innovation, an industry-wide paradigm shift, or a dramatic improvement in earnings. NVIDIA (NVDA) rising roughly 240% in a single year during the 2023 AI boom is a textbook example. Since a lot of expectations are already priced into such stocks, you should check the valuation carefully before buying in.
+20% to +100% — strong performance
This range represents excellent performance that significantly beats the market average (around 10%). It usually appears in stocks with solid earnings growth, strong institutional interest, and alignment with sector trends. Large-cap tech names like Microsoft (MSFT), Amazon (AMZN), and Meta (META) often hit this range in their good years. If this level of return continues for 2–3 consecutive years, the compounding effect becomes very powerful.
0% to +20% — average performance
This range is similar to the S&P 500's long-term annualized return (around 10–12%). It's a level you often see with stable large-cap value or dividend stocks. Defensive names like Coca-Cola (KO), Procter & Gamble (PG), and Johnson & Johnson (JNJ) frequently fall into this range. It may not be flashy, but consistently maintaining this level can build a sizable nest egg thanks to compounding.
-20% to 0% — weak performance
These are stocks that have had a sluggish year, falling short of the market average. The cause could be earnings slowdown, sector headwinds, or rising interest rates. You need to check whether the company's fundamentals are still healthy; if the broader market is rising but only this stock is lagging, there may be company-specific problems.
-20% or worse — severe decline
These stocks have experienced a decline on par with a technical bear market. There's a high chance of serious issues such as a fundamental crisis in the business model, deteriorating competitive environment, or regulatory risk. In 2022, many growth stocks fell to this level due to a sharp rise in interest rates. Investing in stocks in this zone requires deep analysis of the reasons behind the decline first.
🔄 Combining With Other Return Indicators
Perf Year + 52W High = analyzing position and direction
If Perf Year is +40% and 52W High is -5%, the stock has rallied sharply over the past year and is still near its high, indicating strong momentum. If Perf Year is +40% but 52W High is -25%, the stock has risen a lot over the year but has undergone a meaningful correction from its peak. This combination helps you judge the quality and sustainability of a rally.
Perf Year + EPS growth rate = confirming earnings support
By comparing the stock's 1-year price gain with its EPS (earnings per share) growth rate, you can tell whether the price rise is backed by earnings. If Perf Year is +50% and EPS growth is also +50%, the stock rose healthily while maintaining its valuation. If Perf Year is +50% but EPS is only +10%, the rise came from valuation expansion (a higher P/E ratio), and its durability is questionable.
Perf Year + Inst Trans = institutional validation
If the 1-year return is high and institutional net buying (Inst Trans) is also positive, it means institutions are recognizing this rally and continuing to buy more. Conversely, if the 1-year return is high but institutions are actually selling, it could mean they view current prices as high and are taking profits — a signal to be cautious.
🎯 Practical Strategies
Strategy 1: 12-month momentum strategy
The most academically validated momentum strategy is "buy the top 10% of stocks by trailing 12-month return and avoid the bottom 10%." This strategy was made famous by the research of Professors Jegadeesh and Titman in the 1990s, and has been shown to generate excess returns across various markets and time periods. However, during sharp market regime shifts (bubble bursts, financial crises, etc.), momentum strategies can fail badly, so you should always monitor the overall health of the market.
Strategy 2: Mean reversion strategy
Stocks with extremely high or extremely low 1-year returns tend to revert to the mean. This contrarian approach involves taking profits on some names with 1-year returns of +150% or higher, and buying stocks that have plunged -40% or more but still have healthy fundamentals. The strategy exploits the pattern of normalization after extreme moves. However, fundamental analysis is absolutely required — buying simply because a stock has dropped a lot is risky.
Strategy 3: Comparing 1-year returns by sector
Comparing the 1-year returns of the 11 S&P 500 sector ETFs lets you identify the current market theme and capital flows. If Technology (XLK) and Communication Services (XLC) are at the top, it's a growth-favored market; if Utilities (XLU) and Health Care (XLV) are at the top, it's a defensive market; if Energy (XLE) and Financials (XLF) are at the top, it's a value-favored market. This helps you decide your portfolio direction going forward.
Strategy 4: Year-end tax optimization
You can optimize the tax efficiency of your holdings based on 1-year returns. For U.S. stocks held for more than one year, the long-term capital gains tax rate applies (up to 20% for U.S. residents), but Korean investors are taxed at 22% regardless of holding period. So if you sell stocks with a large negative Perf Year to lock in realized losses, you can offset them against realized gains on other stocks and significantly reduce your taxes.
⚠️ Caveats
Beware of the base effect
If the stock price was abnormally low one year ago (e.g., right after the COVID crash), the 1-year return can look exaggeratedly high. Conversely, if one year ago was an abnormally high peak, the 1-year return can look excessively low. So you should check whether anything unusual happened one year ago and, if needed, also look at the 2-year or 3-year return for context.
Dividends may not be included
On most financial sites, the 1-year return shown reflects only price return and does not include dividends. For high-dividend stocks (like Coca-Cola, AT&T, etc.) with a dividend yield of 3–5%, the actual total return can be significantly higher than the displayed 1-year return. When evaluating dividend stocks, you should compare them on a total return basis to be fair.
Don't use past returns to predict the future
Always keep in mind the most basic disclaimer in all financial investing: "Past returns do not guarantee future results." A stock that has risen 200% in one year has no guarantee of rising again over the next year. Momentum tends to work, but once valuations get stretched, a correction can come at any point.
Impact of currency fluctuations
From the perspective of Korean investors, the 1-year return in dollars can differ significantly from the return in KRW. Depending on how much the KRW/USD exchange rate has changed over the past year, your actual return will be different. If the dollar is strong (rising exchange rate), you get an additional FX gain; if the dollar is weak (falling exchange rate), you incur an FX loss. Always factor in the currency effect when calculating portfolio returns.
✅ Investor Checklist
☑ Is the 1-year return of my holdings higher than the S&P 500's 1-year return?
☑ Is the 1-year return supported by EPS growth?
☑ Is the return distorted by a base effect (abnormal price one year ago)?
☑ Have I checked momentum acceleration/deceleration by comparing with Perf YTD?
☑ Have I compared with the 1-year returns of peer companies in the same industry?
☑ Have I checked the real return after reflecting KRW/USD exchange rate changes?
❓ Frequently Asked Questions (FAQ)
Q. What's the difference between Perf Year and Perf YTD?
A. The biggest difference is the starting point. Perf Year uses "exactly 12 months before today" as its base, so it always shows a full one-year performance. Perf YTD uses "January 1st of this year" as its base, so the period covers just a few days in January but almost a full year in December. Perf Year is more suitable for comparing the same period across stocks, while Perf YTD is more intuitive for tracking performance within the current year.
Q. Can I buy a stock now just because its 1-year return is high?
A. According to the momentum effect, stocks with high 1-year returns tend to keep performing well. However, this is only a statistical tendency and does not guarantee the future of any individual stock. When buying a stock with a high 1-year return, always verify that valuation (P/E, P/B, etc.) is not excessive, that earnings growth supports the price, and that institutional buying is continuing.
Q. What should I watch out for when investing in a stock with a negative 1-year return?
A. The most important thing is to identify the cause of the decline. You need to distinguish whether the entire market fell (systemic risk) or only that particular stock did (idiosyncratic risk). If peers in the same industry all fell, it's an industry-wide headwind; if only that stock fell, it's more likely a company-specific problem. If it's a company-specific issue (accounting fraud, management risk, loss of competitiveness), it's safer to avoid investing.
Q. Can I compare 1-year returns between Korean stocks and U.S. stocks?
A. It's possible to compare, but be careful. Korean stocks are in KRW and U.S. stocks are in USD, so to compare directly you need to factor in currency effects. Also, the long-term annualized return of the Korean market (KOSPI) is around 6–8%, which is lower than the U.S. market (S&P 500) at roughly 10–12%. So the same +10% means above-market performance in Korea but only average performance in the U.S.
🇰🇷 Notes for Korean Investors
In Korea, capital gains tax on foreign stocks is levied at 22% (including local income tax) on capital gains exceeding 2.5 million KRW per year. So when you sell a stock with a large positive 1-year return, you need to factor in the tax burden. To make efficient use of the 2.5 million KRW annual tax exemption, a smart tax-optimization strategy is to sell both winning stocks and losing stocks within the same year.
You also need to consider the impact of the KRW/USD exchange rate. If the dollar has been strong over the past year (rising exchange rate), the FX gain is added on top of the USD-denominated return, making the KRW-denominated return even higher. The opposite case produces an FX loss. Returns shown on Korean brokerage apps are usually converted to KRW, so they can differ from the USD-based return you see on Finviz.
Among Korean retail investors abroad (so-called "Seohakgaemi"), it's common to think, "The 1-year return is negative, so I should cut my losses," but you shouldn't make a sell decision based solely on the 1-year return. Consider the company's fundamentals, industry outlook, and valuation together, and first check whether your investment thesis is still valid. If the thesis is broken, cut the loss; if it's still valid, be patient and hold — this tends to yield better results in the long run.