Are the MWRR and TWRR displayed in-app cumulative or annualized?
Both are cumulative returns for the time period selected.
How is TWRR calculated?
Details on calculations can be found in this article.
Why is my TWRR negative, but my MWRR and Total gain are positive?
TWRR is negative because your asset allocation and any changes you’ve made to your asset allocation have had a negative return over the selected time period.
However, because the market at the time of your cash flows (e.g., buys, sells, dividends) was favorable, your MWRR and Total gains were positive. This means the average dollar in your portfolio grew over the selected time period.
Why is my TWRR positive, but my MWRR and Total gain are negative?
TWRR is positive because your asset allocation and any changes you’ve made to your asset allocation have had a positive return over the selected time period.
However, because the market at the time of your cash flows (e.g., buys, sells, dividends) was not favorable, your MWRR and Total gains were negative. This means the average dollar in your portfolio declined over the selected time period.
Does TWRR reflect my market gains and dividends?
Yes, TWRR reflects both market gains and dividends earned by your underlying holdings. However, TWRR is not impacted by the timing of when the dividends or other cash flows occurred.
Does TWRR reflect any changes I’ve made to my asset allocation?
Yes, TWRR reflects the performance of your asset allocation and any changes you’ve made over the selected time period.
Example:
June 1: VTI (50%) / VXUS (50%)
June 15: VTI (70%) / VXUS (30%)
TWRR would reflect this allocation change, but it excludes the impact of any buys, sells, deposits, and withdrawals. This helps investors evaluate their strategy.
Why are my MWRR and TWRR different? What does this mean?
Comparing MWRR, TWRR, and your benchmark’s TWRR can help you better answer these questions:
Is my strategy under- or outperforming my relevant benchmark?
Did the timing of my cash flows (buys, sells) help or hurt my performance?
Is my strategy under- or outperforming my relevant benchmark?
If your Pie’s TWRR outperforms your chosen benchmark’s TWRR, then your asset allocation outperformed your benchmark over the selected time period.
If your Pie’s TWRR underperforms your chosen benchmark’s TWRR, then your asset allocation underperformed your benchmark over the selected time period.
It’s important to remember that past performance does not guarantee future performance.
Did the timing of my cash flows help or hurt my performance?
Scenarios | Meaning | Example |
TWRR exceeds MWRR | Timing of buys/sells hurt performance | TWRR of 5% on underlying asset allocation outperformed benchmark’s TWRR of 3%, but a large purchase right before a market decline resulted in suboptimal MWRR of –5%. |
MWRR exceeds TWRR | Timing of buys/sells helped performance | TWRR of 5% on underlying asset allocation outperformed benchmark’s TWRR of 3%, but a large purchase right before a market increase amplified returns, resulting in MWRR of +10%. |
MWRR is equal to TWRR | Timing of buys/sells neither helped or hurt performance | TWRR of 5% on underlying asset allocation was roughly the same as MWRR of 5%. |
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All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using margin can add to these risks. Users utilizing APEX cleared margin accounts should review the APEX margin account risk disclosure before borrowing. Users utilizing M1 cleared margin accounts should review the M1 margin account risk disclosure before borrowing. M1 Margin Loans are available on margin accounts with at least $2,000 invested per account. Not available for Retirement or Custodial accounts. Margin rates may vary.
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