Measuring returns is essential for evaluating the success or failure of an investment program. At first glance, this seems like a straightforward exercise. However, return measurement becomes ...

Time-weighted return (TWR) calculates an investment portfolio or fund’s performance while accounting for external cash flows. Investment funds usually have money flowing in or out at various times.

Of the many ways to measure an investment, time- and dollar-weighting are two of the most common. The time-weighted return on investment tells you how it performed objectively. If someone placed $1 in ...