Investment Performance

From Timetotrade

Performance Metrics

Investment Performance
Time Weighted Returns
Money Weighted Returns
Internal Rate of Return
Unit Valuation
Unit Value
Time v Money Weighted
Unit Valuation Shortfalls

Portfolio Performance

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A topic that tends to generate a great deal of debate, is how best to determine return on investments. There are a variety of performance metrics, that tend to fall under one of the following classifications:

Time Weighted Return (TWR) aka Time Weighted Rate of Return
Money Weighted Return (MWR), aka Money Weighted Rate of Return

Here we will look at an overview of the pros and cons of each metric, illustrated through worked examples, and provide some guidance as to when each type of performance metric should be applied. For the purpose of this discussion, the Internal Rate of Return (IRR) metric will be used as a Money Weighted Return metric, and the Unit Valuation System will be used as a Time Weighted Return metric.

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Disclaimer: The data provided is for educational and informational purposes only. Interpretation and use of the data provided is at the user's own risk. All data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All data is provided "as is" without warranty of any kind. We make no representations as to accuracy, completeness, or timeliness of the data on this site and we reserve the right, at our sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any time. Past performance is not a guarantee of future results.

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