IRR, Money-weighted Return, Time-weighted Return, and the Modified Dietz Method
$25
A rate of return from which the effects of unsolicited changes in capital are removed is usually called a time-weighted rate of return (TWRR), in contrast with money-weighted rate of return (MWRR) where such effects are not suppressed. MWRR is sometimes identified with internal rate of return (IRR); the author suggest that MWRR and IRR should not be identified with each other.
Author: John Kahila, Thompson Corporation
A rate of return from which the effects of unsolicited changes in capital are removed is usually called a time-weighted rate of return (TWRR), in contrast with money-weighted rate of return (MWRR) where such effects are not suppressed. MWRR is sometimes identified with internal rate of return (IRR); the author suggest that MWRR and IRR should not be identified with each other.
IRR, Money-weighted Return, Time-weighted Return, and the Modified Dietz Method
