Per the SEC Form N-1A,
P(1+T)n = ERV
P=a hypothetical initial payment of $1,000.
T=average annual total return.
n =number of years.
ERV= ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10-year periods (or fractional portion).
However, I was unable to find SEC guidance on how to calculate n.
For example, what value should
n be when calculating average annual total return for a mutual fund with a return start date of Feb 1 2020 and end date of March 31 2021?
Would I divide the number of days between those dates (inclusive of start and end date) by either 362.25, 365.2425 (average Gregorian year), 365, or 360?
Would I include Feb 29 2020 in my day count?
Does the SEC provide guidance on how to calculate the number of years when it has a fractional part? If so, where can I find this documentation?