Stock performance is meaningless without a time interval. That’s why when investors talk about the performance of a stock, they use time frames like one year, three years, five years, or longer.
Often, if they want to measure its performance on a shorter interval, they’ll talk about year-to-date, or YTD.
But what does year-to-date (YTD) mean, and why do investors use it?
What does year-to-date mean?
In finance, year-to-date, or YTD, is the time between the present day and the beginning of the calendar year. Usually, it’s used to measure the performance of a financial asset like stocks in the current year so far.
Investors use this performance to discuss and compare against other assets in the same or different classes over the same period to analyse and uncover opportunities.
Why do investors use year-to-date?
There’s no natural break in the stock market. It’s not a seasonal business, and the stock exchange is open for trading every weekday, with the exception of a few holidays.
Without a clear break in stock market activity, investors need to choose a starting point to measure the returns of a stock, and the first of the year offers a natural starting point since a new year naturally signals new beginnings.
Additionally, the end of the year generally coincides with a lull in trading activity and a relative lack of news. The week between Christmas and New Year’s is traditionally a week when Americans, including finance professionals, take a vacation. The new year gives investors the chance to wipe the slate clean.
Because there’s little news in the last week of the year, it also makes sense to start the year-to-date clock since there’s unlikely to be any news that swings the stock substantially the way there is during, say, earnings season.
Why year-to-date can be misleading
When investors talk about stocks, they can use any time frame they want, ranging from one week or one month to 10 years or even longer, and some time frames will make a stock look better than others.
Take Rolls-Royce (LSE:RR.) as an example. The engineering giant saw its valuation climb from 588.4p at the start of 2025 to 771.4p on 22 April 2025. Therefore, on 22 April, the YTD performance of Rolls-Royce shares was +20.9%.
However, by using a different measurement period, the performance of Rolls-Royce shares can look wildly different. In the one month leading up to 22 April, the stock is actually down by 10%. Meanwhile, zooming out to a full year reveals a +75.1% gain for shareholders without factoring in any potential dividends.
No single measurement gives a complete picture of a stock. In this case, the comparison between Rolls-Royce’s year-to-date performance and its one-year performance shows that much of the firm’s gains came in 2024 versus 2025.
So, looking at year-to-date returns in isolation doesn’t give a complete picture of a stock’s returns, and it’s easy to manipulate by choosing a period that backs up the argument you’re making.
How to use year-to-date
Comparing a stock using multiple periods can give you a better sense of its historical performance than just using one, but the year-to-date metric is also useful for comparing one stock or investment with another.
For example, investors often use the year-to-date metric to compare indexes. As of 22 April 2025, the year-to-date performance of the FTSE 100 is +0.2%, while the FTSE 250 is down 6.7%.
That’s a big gap, and it tells you that large-cap stocks are currently outperforming small- and medium-cap companies.
When the next bull market starts, it’s a good bet that you’ll hear more references to year-to-date returns for the major indexes.