Time Weighted Rate of Return

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Financial glossary Financial glossary

The Time Weighted Rate of Return is used to calculate an investment’s performance. It represents the measure of the weighted return for the underlying period. From an analytical perspective, it is expressed as the average of the simple returns achieved in each period in which there was no buyback or deposit.

It reflects the fund manager’s viewpoint, takes into account that the fund manager cannot influence the incoming and outgoing cash flows, and that the fund manager’s performance must be assessed against an objective benchmark.

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