Explanation of TWR %

[evankoh]

In case, you have not seen this → How to Use the Time-Weighted Rate of Return (TWR) Formula

@zhengyukwek

However, I wanted to check what do the numbers mean? If my current TWR% is about 83%, does that mean that over the course of the last 1 year and 1 month, my portfolio grew by around 83%?

It means that your portfolio of stocks grew by 83% over the 1 year and 1 month but it does not consider the effect of money inflow and outflow.

Basically, it means that it assumes that you had $1 in your stocks at the beginning and it will become $1.83 at the end. However, if you did inject more money or remove money from it, it ignores all those.

@zhengyukwek

Also, does the number indicate any kind of time horizon? E.g. a person who has achieved a TWR% of 83% over 1 year, versus someone who achieves the same TWR% in 5 years, has obviously performed better.

Ideally, you should compare TWR between different portfolio on the same time period.

Cheers,
Evan