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Anonymous

07 May 2021

∙

General Investing

What's wrong with my XIRR/TWR calculation?

Stockscafe calculates the following Time-Weighted Returns and XIRR for 2020 for myself:

Portfolio - 17.33%
ES3 - 14.95%
SPY - 25.65%
VT - 30.85%
XIRR - 25.93%

From what I understand, ES3's TWR should be -8% or so for 2020, so does that mean all the values above are wrong? Or am I missing/misunderstanding something here?

Thanks in advance for the clarifications.

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07 May 2021

ES3 return for 2020 is about -12%. But your XIRR for ES3 can be positive for 2020 because the stock didnt linearly decreased in price throughout the year. Your buy/sell timing matters in this calculation. For eg. if you bought march crash, then you most likely would have a positive XIRR because on average, the stock price has increased since the crash. You can check the graph and note the buy(sell if you have any) dates and you can easily calculate it yourself.

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