Time-weighted return calculator

Enter portfolio values for consecutive sub-periods, place each cash flow at the start or end of its period, and the calculator computes each period return before chaining them into one cumulative figure. This makes the result useful for comparing a portfolio manager, model, or strategy across accounts whose owners added or removed different amounts of money at different times.

Split the measurement window at external cash flows

Time-weighted return begins by dividing the full measurement window into sub-periods. A boundary should occur whenever money enters or leaves the portfolio for reasons unrelated to investment performance. Contributions, deposits, withdrawals, and distributions taken out of the account are external cash flows. Interest, dividends retained inside the portfolio, fees, and market gains or losses normally remain part of performance rather than being entered as cash flows. For every sub-period, provide the market value at its beginning and end. Then enter the external cash flow as a positive number for a contribution or a negative number for a withdrawal. Select start when that amount was available for investment throughout the sub-period. Select end when it arrived after the period's performance, or when a withdrawal was taken after performance occurred. Accurate boundary valuations matter: if a flow happened halfway through a long period, create a valuation boundary at that time instead of labeling the flow approximately. The rows must be supplied in chronological order, because the calculator chains their returns in that same order.

Understand the sub-period formulas and chaining

For a cash flow placed at the end, the calculator subtracts the flow from the ending value and divides the adjusted ending value by the beginning value. For a cash flow placed at the start, it adds the flow to the beginning value and divides the ending value by that invested amount. Subtracting one from either ratio gives the sub-period return. The calculator then converts every return to a growth factor, multiplies all growth factors, and subtracts one from the product. For example, a gain followed by a loss is compounded rather than averaged: equal positive and negative percentages do not cancel because the second percentage acts on a different capital base. The response includes decimal and percentage forms of every sub-period return, the final growth factor, and the cumulative time-weighted return. Rounding is applied only to reported values after each full-precision calculation has contributed to the chain. This preserves stable results while avoiding the drift that would arise from chaining visibly rounded intermediate percentages.

Interpret the result and recognize its limits

Use the final percentage to evaluate the investment process independently of an account owner's funding decisions. It is especially appropriate for comparing managers, benchmarks, model portfolios, or the same strategy across accounts with different contribution schedules. A positive result means one unit of capital exposed through all sub-periods grew; a negative result means it declined. The growth factor expresses the same outcome multiplicatively, so a factor above one indicates growth and a factor below one indicates loss. Time-weighted return is not the investor's personal earned return when large deposits or withdrawals occurred. For that question, a money-weighted return or internal rate of return gives cash flows weights based on when and how much the investor supplied. This calculator also does not annualize the answer, infer missing valuations, estimate intra-period flow dates, or compare against a benchmark. Its accuracy depends on correctly classifying external flows and having market values at suitable boundaries. Review the listed sub-period returns to catch an implausible row before relying on the chained result in reporting or analysis.