Anonymous
I have a Syfe 100% Reit+ portfolio, where return is positive while the time-weighted return is negative. Why is it so?
My portfolio return shows a positive S$400.22(+8.30%) but the time-weighted return shows a -3.38%. Do not understand the algorithm because if I decided to withdraw, I'm getting back positive money gains but the time-weighted is negative, does it mean in terms of timing the market, I've invested when prices are higher??
Also, I've realised when someone uses my promo code and I get the bonus $10 in, my portfolio return usually increase. Does that mean it includes the bonuses too?
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Hi!
I felt time-weighted return (twr) comes in useful if u put in sums more than once during your investmt period or u done dca(dollar cost averaging)
TWR formula multiplies the returns for each sub-period or holding-period (i.e. your daily Net Asset Value), which links them together showing how the returns are compounded over time. The TWR helps eliminate the distorting effects on growth rates created by inflows and outflows of money.
(For example, if they occurred in the beginning of the month they would have a higher weight than if they occurred at the end of the month.)
Just to share many ways to measure returns for assets, not just the 1-2 mentioned here...
your overall portfolio returns or the money-weighted returns (MWR )incorporates the size and timing of cash flows, a "straightfwd" to understand method...
MWR sets the initial value of an investment to equal the future cash flows such as dividends added, withdrawals, deposits, and the sale proceeds. In other words, MWR helps determine the rate of return needed to start with the initial investment amount factoring all of the changes to cash flows during the investment period including the sale proceeds.
Hope it wont sound more confusing after reading, initially i felt so too!
extra reading: Total Returns show the overall returns of your portfolios and is the sum of both of Portfolio Returns and Currency Impact, net of all fees.
_Essentially, Investment/portfolio Returns (1) + Currency Impact (2) = Total Returns (3)
_if your portfolio is invested in USD denominated assets, they could be equities or bonds from europe or china etc but denominated in uSd...