Total return and absolute return are two frequently used terms in the investment world. But what is the difference between the underlying investment strategies? Total Return investing is an investment strategy which is mainly used for bond investments. This strategy got famous when Bill Gross started to implement total return strategies in his portfolios in the 1980s. As opposed to a traditional bond investment where the investors clip steady interest payments and hold their bonds until they mature, a total return strategy is more active as the manager tries to optimize the portfolio structure to gather returns from all sources,

Over the past decade the S&P 500 has seen a total return of 252.2% (12/31/09 through 12/17/19), which translates to a compound annual total return rate of 13.5%. Over that time two new sectors were added to the index. The real estate sector was separated from the financials sector and the communication services sector was created by removing the telecommunications services sector and pulling constituents from the information technology and consumer discretionary sectors. The information technology sector posted the greatest compound annual total return of 17.3%. Within the sector, the software & services (17.8%) and semiconductors & semiconductor equipment (17.3%)