Each point on this chart measures the XIRR of the portfolio at a particular point. Because of this, XIRR is a more accurate way to evaluate an investment. e. Since Michael didn’t contribute to or withdraw funds from his portfolio during 2020, his time-weighted rate of return is easy to calculate. . for the first 10 years and 6 percent p. The XIRR function calculation shows in Excel as XIRR(B2:B7,C2:C7) or XIRR(B2:B7,C2:C7,. sale to a strategic or. We can helpxirr_calculator_zerodha. 115 * 1. Time Weighted vs. Select an empty cell where you want the XIRR result to appear. Measures the actual returns of a portfolio for a given time period. While I could just look at the XIRR of each individual investment, the size of those investments may differ substantially (e. IRR. 0530 (to four decimal places), equivalent to 5. Before we dive into the Modified Dietz method for calculating rates of return, let’s revisit the essentials from our last two rate of return blogs. XIRR in mutual funds. 6. 1050 = 10. 3. XIRR. b. November 18, 2020 at 3:50 pm. Hence, NPV = Cash flow over the time period/ (1 + r)^n = 0Understanding the difference between TWRR and MWRR & knowing when to use each can empower you to make informed decisions about future investment strategies Time-Weighted Rate of Return vs. TWRR/CAGR: Weighted more heavy to time. By contrast, the XIRR formula considers the dates when the cash flow actually happens. Showing how the XIRR function can be used to calculate the IRR of a portfolio. Here, taking the same example we can see Investment is made at irregular intervals. STEP 1: Gather all information on the investment's cash flow, including the dates and sums of any deposits, withdrawals, and dividends. You need to use the excel DATE function to do this. The Pros and Cons of TWRR. Hypothetically, say in the course of those two years, the mean rate of inflation is 100%. If the first value is a cost or payment, it must be a. 00%. The rate of return is one of the simplest ways of calculating the rate of return over a certain period. While dollar-weighted performance is weighted by the amount of dollars in an account at the beginning and end of the performance period, time-weighted performance is based on the amount of time the. 10. Unlike MWRR, TWRR is not sensitive to the major outflows and inflows of funds, which is quite unfair in evaluating the fund manager’s performance. in my below example, i get diff YIELD results depending on whether i choose 2 (semi) or 1 (annual). The difference is due to several factors. Meaning that even though I added. I tried to calculate XIRR for Zerodha. In the fifth year, the portfolio value grows by 15%. Investment return analysis in Microsoft Excel tends to gravitate toward a consistent, recurring series of cash flows, and the Excel IRR function. I have not done any research to try to ascertain when it is or when it isn’t; I. The advantage of using excel's XIRR function is that you can accurately model these time. So, when it comes to XIRR vs. The XIRR Formula in Excel has the following components: Values – This is a required parameter that refers to a series of cash flows that correspond to a scheduled. Similar to IRR, MIRR is used to analyze the profitability of a project. 5% is considered good. In our example, that comes out to be 10%. 36% for the year. Mutual fund companies use internal rates of return to estimate the performance of a mutual fund over a given period. This means, when large cash flows occur during volatile periods, the MWRR can differ substantially from the TWRR. This can be done by subtracting the sum of the starting balance and the cash flow, from the ending balance to calculate periodic profit (loss). The function returns the value 0. XIRR = AEY. d[j] is the date corresponding the CF[j] cash flow. . As we can see in the chart above, the Modified Dietz rate of return is nearly identical to the money-weighted rate of return. This has a substantial impact on the internal rate of return calculation. Instead, we will use excel and the built-in function XIRR. 10%. The guess argument was omitted, so the XIRR function operated on the default value of 0. Along with that it takes the date and portfolio value for which the XIRR needs to be calculated Riyadh Office: Suite 102, Signature Center Prince Turki bin Abdulaziz Al Awwal Road, Hittin Riyadh 13512-2110, Saudi Arabia +966 11 250 7720 Let’s review some important lessons here. In this case, the XIRR function comes into play to calculate a correct internal rate of return, taking into consideration the periods of different sizes. Goal-seek for XIRR. The modified internal rate of return (MIRR) is a financial metric to estimate the profitability of a project and rank equally sized investments. =1+F5. It is a mathematical formula used to calculate return on investments (ROI). If I use Excel's XIRR function with the starting outflow and ending inflow I also get 7. You use this function to find the internal rate of return for periodic cash flows such as monthly, quarterly or annual. All dates must be in. IRR FormulaXIRR vs. In other words, the XIRR calculation has taken the result for the month of January and multiplied it out for a full year, whereas the EMDIETZ and TWRR. Now on 3rd March a 3:2 split is announced. Next, input the following formula to calculate the 1 + Return value. The performance difference between TWRR and MWRR is based on what has a heavier weight. เราสามารถใช้ TWRR คำนวณผลตอบแทนจากการลงทุนได้ ดังนี้. どうもシナトラです。 第2回はややこしい話しになり、第3回も引き続きややこしい話しになります（笑） なるべく分かりやすく説明していくつもりですので、どこかの誰かに役立てればと思います。 さて、今回はTWRR法に引き続き、MWRR法を使って投資家の個人リターン（キャッシュフローの. 84%. . CAGR smooths out any fluctuation, in returns, that might have occurred within each period and provides the annualized rate of return of an investment. If the returns are the same (like in an FD), the maturity value will be known the moment you create the FD. put a minus sign before the amount) and cash inflows (dividends, SWP, redemptions) as positive values. Put the set cell value as zero, by changing the cell with the rate. According to the Microsoft Office documentation, “XIRR is closely related to XNPV, the net present value function. 13. It is calculated using the periodic return on investment formula, which we have seen in this article , dividing the investment period into several sub-periods that take into account the value of the portfolio. NY 10019. The MWRR results are noticeably different than the TWRR results from our first example. 4mo. You started the investment process in December 2018; you continued to do so till June 2020. Jan 1, 2008 – Dec 31, 2008. While TWRR gives clarity on the overall performance of the assets selected for investments, XIRR takes into account the timing of staggerecd. IRR returns the nominal interest rate per period. Then, indicate the cell with NPV as the set cell. Direct MFs TER is in the range of 1-1. 7%) x (1+ 3%) – 1. 98. Syntax. academy 4 minute read Investors often ask about the difference between time-weighted return (“TWR”) and internal rate of return (“IRR”). Rate of return help. The formula used to calculate the time-weighted rate of return looks like this: TWR = [ (1+HP1) x (1+HP2) x (1+HPn)] – 1. XIRR XIRR Worksheet Initial Date Balance Cash In Cash Out End Cash Flow TWRR Worksheet Return Time Weighted Return XIRR Notes TWRR Notes Notes for Both account balance must be noted when cash flow occur - Start balance and cash in must be set as negatives - Cash Out and End Balance must be set as a positive - You only need start and end. Absolute returns are the actual profit or loss made on an investment over a certain period of time. the TWRR. It’s your real investment return. As its name suggests, MIRR is a modified version of the traditional internal rate of return that aims to overcome some deficiencies of IRR. XIRR calculates the rate of return that would make the present value of all cash flows, both inflows and outflows, equal to zero. The calculation of IRR makes use of the time period of the investment and the cash flows over that time period. A Money Weighted Return measures the compound growth rate in the value of all funds invested in the account over the evaluation period. And it does not matter what the periods are so long as they are evenly spaced. Meaning. I have a moving window, where I start off with i = 1 , CF = CF[1], d = d[1] and as I progress forward , the rest of the cash flow gets involved. 10. TWRR = [ (1+HP1) x (1+HP2) x (1+HPn)] – 1. First, the MWRR assumes all cash flows receive the same rate of return while invested. The formula used in the calculation of interest rate or internal rate of return is: =XIRR(B4:B9,C4:C9) The Internal Rate of Return for this investment is. Step 2: You get the XIRR value as follows. IRR – Why The Difference Matters The TWRR calculates a return by accounting for cash that was added or deducted to/from the account. Jim's TWRR is 20. Similarly, you can check the CAGR for different funds for different time frames like 3, 7 and 10 years. Investors and portfolio managers alike grapple with the best calculation methodology to use in performance measurement. This makes it a Holy Grail. Timing does not matter. This lecture on #XIRR explains the use of #XIRRinExcel and the difference of. In this formula:The time-weighted rate of return, or TWRR, is a way to measure the investment performance of a managed fund or portfolio. Time Weighted Rates of Return (TWRR), measure the returns of a portfolio/security irrespective of cash flows – effectively. 33% market loss. There's a handy guide to using OpenOffice to calculate XIRR (internal rate of return) from Goldstone in this thread. Time weighted is return does not consider when you decide to put money in the market, nor how much. RR is the improved version of IRR, where XIRR considers a scheduled series of cash flows. TWR is not affected by the timings of the external cash flows. Capital-weighted return, also: money-weighted return, internal rate of return (IZF), internal rate of return (IRR). This means the goal is to make present value outflows equal to present value inflows, as outlined in the formula above. However, the IRR is 20% but the CAGR is lower. I mentioned that XIRR is a modified version of CAGR. The project gives us cash flows in the middle of the first year, after 6 months, then at the end of 1. The result of this calculation is 16. A noob in investing. Due to these shortcomings of MWRR, TWRR is recommended to be used as a performance measure for Mutual funds and other investment vehicles where control cant be exercised over timings and size of. Excel allows a user to get an internal rate of return of an investment with returns occurring at regular or irregular intervals. It is calculated as a geometric average to. It is a single rate of return when applied to all transactions (investments and redemptions) would give the current rate of return. In the above example, the investor makes mutual fund investments through SIP in each portfolio but at inconsistent intervals and redeems them at the end, hence, XIRR is. Technically, MIRR is the rate of return at which the net. The goal-value is formulated in a way that it should be zero, as this is what the binary-search procedure is aiming at. Compared to IRR, XIRR is considered more accurate due to the consideration. Here is a 7-minute video that discusses the differences and similarities between the two types of annualized returns: the Compound Annual Growth Rate (CAGR) and the extended internal rate of return (XIRR). I know XIRR does need a date and IRR doesn't. Formula Syntax. How much returns have you earned?. Step 4: Now, use the XIRR function in any other row. So as you can see, IRR depends a lot on timing. TWRR Worksheet Return Time Weighted Return XIRR Notes TWRR Notes Notes for Both account balance must be noted when cash flow occur. of days you are examining ÷ 365))-1 If you try using the XIRR on the values in the image above, you’ll find that the annualised MWRR is equal to 3. We’ll focus on simple. 1 or 10%. 36% is a much more reasonable number, but the XIRR calculations are also correct given the data it. Time weighted return (TWR vs. If we adjust the returns so that the CAGR is 20%, we get. 48. XIRR and IRR both calculate the internal rate of return from the investment's cash flows; the only difference is that the latter can only calculate the IRR for periodic cash flows. IRR doesn’t take into account when the actual cash flow takes place, so it rolls them up into annual periods. CAGR. ) However, that requires more information; or we can make some assumptions, for example: all deposits occur at the beginning of the month. TWRR = 0. It is your personal rate of return as it calculates your actual return on investments. Keep in mind that these are. a. In the third quarter, the fund lost 4 percent and $70 was withdrawn. In the case of SIP, since there are multiple investments (therefore multiple purchase prices) and different time periods for each installment, calculating returns is a bit tricky. Return : {108150. XIRR vs CAGR Difference XIRR vs CAGR: What are their Advantages and Disadvantages? Advantages of XIRR. (TWRR). What's the difference between IRR vs. XIRR is a method for calculating the return on an investment where there are multiple cash flows happening at different times. Time-Weighted Return. 10,000/- on the 1st of. MWRR. 7\% $$ Money-weighted Rate of Return Vs Time-weighted Rate of Return. How To Understand Investment Returns (MWR vs TWR??)In this video, we’re breaking down the different ways to measure investment returns. TWRR (time weighted rate of return) is an appropriate measure that is applied while evaluating the performance of fund managers and financial advisors who zero-control over the time or amount of cash flows, evaluating the asset allocations of funds and benchmarking them against market returns. Notice that the TWRR and MDIETZ calculations return the same result. For example. 75%. The whole procedure is discussed below. Higher fees mean that PMS need to generate higher gross returns to deliver the same net returns as MFs. In that case you would write: Result =. For Excel XIRR, the mathematical equation is (from the Excel XNPV support page): P[j] should be called CF[j]; it is each cash flow. Level 1 CFA Exam Takeaways: MWRR vs TWRR. The built-in function is called XIRR and allows you to. XIRR vs IRR; Financial caution Using the XIRR calculator. It is a variant of the Internal Rate of Return (IRR) formula used to calculate the return on investment of a mutual fund. Both return metrics have a place in presenting meaningful. IRR doesn’t take into account when the actual cash flow takes place, so it rolls them up into annual periods. CAGR is an abbreviation for the “Compound Annual Growth rate. 08%. Time Weighted. The first payment is optional and corresponds to a cost or payment that occurs at the beginning of the investment. MWRR/XIRR: Weighted more heavy to money. That is, for less than one year's worth of data, we should only calculate a cumulative TWRR or an average periodic TWRR. Click on What-If Analysis. In that case, you might see multiple sign changes in E1:E21. These measures allow an investor to find out the rate of return he is earning on his investment. The XIRR formula requires two inputs: the cash flows and the dates for each cash flow. 03% In order to understand MWR vs TWR, it is important to understand the evolution of performance theory. Time Weighted. So if I started with $100,000, added $10,000 to the account, and ended up with $110,000, what should be the return on my investment? The basic rate of return takes the gain for the portfolio and divides by the (original) investment amount. When to use IRR vs. 78%, it means from the start of 20th July 2020 to 6th Feb 2021, the “interest rate earned” is an annualized 14. to measure the rate of return over a multi-year period. 64%. 7%. To learn more. The simplest way to calculate the time-weighted return is to use the GEOMEAN function. i am having the same issue with XIRR and YIELD. I prefer to use TWRR (aka TWIRR). 059)^{0. mirr is like. A: It helps to distinguish between the Internal Rate of Return (“IRR”) and the Excel formulas =IRR and =XIRR. The formula is- XIRR (Values, Dates, Guess) = XIRR (B2:B14, A2:A14) = 67. In Excel, the input would be like this: =XIRR(Dates, Cash Flows). In the second case, you earn a constant 12 percent p. As we can see in the chart above, the Modified Dietz rate of return is nearly identical to the money-weighted rate of return. XIRR: the money-weighted annualised return formula. Case 4: SIP for greater than a year. It is done by assigning unique dates to every character's money flow. Short. XIRR and TWRR have their pros and cons and such differences can come depending on timing and quantum of investment. Loaded 0%. Type the formula =XIRR (values_range, dates_range), where ‘values_range’ is the range of cells containing your cash flows and ‘dates_range. However, IRR re-mains the standard for private investments. Let us look at some of the key differences in IRR vs XIRR. Internal Rate of Return. Key Takeaways. 56% VSMGX Vanguard LifeStrategy Moderate Growth fund, has US + International. Internal Rate of Return (IRR) Internal Rate of Return is the rate that calculates the profitability for the investor. Remember that money going out is -ve and coming in is +ve. BMV = Beginning Market Value. The formula used in the calculation of interest rate or internal rate of return is: =XIRR(B4:B9,C4:C9) The Internal Rate of. How is TWRR different from XIRR? TWRR or Time-Weighted Rate of Return is a measure of the compound growth of an investment irrespective of money flows. You’ve constructed what you consider to be a strong funding portfolio, however solely time will inform how the portfolio performs and what modifications wouldPower BIXIRR. If your goal is to reach a $1 million by age 65, IRR tells you whether your portfolio is growing fast enough to get there on time. The TWRR’s primary advantage is it reflects the true performance of an investment manager because it only counts investment returns in isolation of cash flows. 25th June 2020. As the name implies, the periods with the most money will be weighted higher in the return calculation. To calculate XIRR in Excel, you need to follow these steps: Enter your cash flows and their corresponding dates in two separate columns. 79%. These are the steps I followed. XIRR (values, dates, [guess]) The XIRR function syntax has the following arguments: Values Required. Mutual Fund Returns can be quite tricky to understand. The XIRR formula uses the cash flow from these gifts of about $100 for its calculation. 56% versus +16. In Google Sheets, the transactions are called cashflow. We've created a fact sheet to help you distinguish the two primary measures: the time-weighted rate of return (“TWR”) and the internal rate of return (“IRR”). Calculating XIRR value using XIRR Formula =XIRR (H3: H9, G3: G9) The answer will be 4. 06-114, 142W 57th Street. Achieving comparability among firms’ compliant presentations requires as much uniformity as possible in the methodology used to calculate portfolio and compositeThe table below shows the monthly rolling returns for 1-month, 3-months and 5-months for Mutual Fund (Growth) for a 13-month period starting from 1 Jan 2015 to 1 Jan 2016. If an investor uses IRR to calculate the. 52000. IRR measures the overall growth of the portfolio. 25%, which is a significant difference from the result using the IRR function. 091 = 1. XIRR Vs IRR Vs CAGR | XIRR In Excel Explained By CA Rachana Ranade. If the second parameter is not used in the function, Excel will find an IRR of -10%. 90% VBIAX Vanguard Balanced Index fund, has US only and no. XIRR. A CAGR return assumes all investments have been made at the beginning of the year, while XIRR considers periodic instalments as separate investments. It is simply the percentage difference in the money you had before investing and the money you have now. This gives Michael a 2020 return of 10. 3. Typically, the investment manager of a pension fund has no control over these cash flows, which are a function of contributions and benefit payments, so it is not fair to use the. Method of Calculation: XIRR Similar to Case 3, XIRR is also applicable when calculating the return when your SIP is for greater than one year as well. Time weighted return (TWR vs. In the following dataset, you can see that the cash flow is month based instead of year based. We’d like to point out that the absolute return for the same investment would have been. XIRR Example. depend on the coupon frequency. Simply put, it is the internal rate of return. The primary difference between CAGR and XIRR lies in their consideration of cash flows. This lecture on #XIRR explains the use of #XIRRinExcel and the difference of #XIRRvsCAGR. The cumulative 3-month TWRR is the product of the periodic rates of return, shown in D6. Subsequent payments are discounted based on a 365-day year. An account from which you can withdraw $80 after just one day must be paying higher interest than one from which you can only withdraw $80 at the end of the year. About endpoints. MIRR Function in Excel. Contents:Would you like to learn more about our Strategy & Corporate Finance Practice?How to calculate Compound Annual Growth Rate?Meaning of CAGRCAGR vs IRR: IRR and CAGR will be same when While the annual rate of return provides the amount of return every year, CAGR offers the return over the whole period. Every period return is calculated by eliminating the impact of external cash flows on the portfolio. Since investment managers usually have no control over clientTime-Weighted vs. Modified Dietz Method: A method of evaluating a portfolio's return based on a weighted calculation of its cash flow . CAGR. MWR) Time weighted return (TWR) – sometimes called the time weighted rate of return (TWRR) – is the common method used by mutual fund companies to report performance. Beware of XIRR returning what appears to be zero. The data given is shown below: The formula to use will be: We will leave the guess as blank so Excel takes the default value of 10%. If I change certain cashflows values I can get the values to align. A Quick Review: TWRR vs. In our case, our set cell is B7, we change it to 0 and we are changing cell B4. 66%. Portfolio construction involves a two-stage process: A filter-based approach to create an investible universe of 25-30 stocks. So ideally, if your investments are to be computed for each purpose, as in investment in different instruments, it is best to calculate indvidual XIRR, ie , if I put 5k monthly in ULIP and ELSS for a period of 5 years, then I would, at the end of 5 years,. Using the XIRR formula for every SIP instalment or liquidation, if any, would endow you with an understanding of your overall investment's current value. Basically, the larger the rate, the more the values are reduced. 26500. CAGR calculates the rate of return based only on the beginning and ending investment value. The TWRR is used to show the funds’ returns in various documents, such as Fund Facts. Like CAGR, internal rate of return, or IRR, is a metric used by commercial real estate investors to calculate the profitability of an investment. Suppose a project started on January 1, 2018. XIRR comes in handy when you make regular investments in a mutual fund over an extended period. In order to calculate TWRR an investor needs to know when investment contributions or withdrawals were made, how much they were, and where the portfolio was valued at the time. 8y. Whats the Difference Time-Weighted Return vs. Whereas the 7. It simply looks at the percentage change in value from one period to another. 3% from year 0. Note that the formula =XNPV (XIRR (A2:A13; B2:B13); A2:A13; B2:B13) returns a very small. In other words, the XIRR calculation has taken the result for the month of January and multiplied it out for a full year, whereas the EMDIETZ and TWRR calculations reflect the return for the month of January. What are 5 year trailing returns? Trailing returns measure how well a mutual fund has performed over a specific time period. The time. The IRR is also a rate of return (RoR) metric, but it is more flexible than CAGR. Redemption value = 108150. The time-weighted method differs (further) from other methods of calculating investment return, in the particular way it. A better measure here would be time-weighted return or TWRR for short. 79%. If you format the. By considering both measures, you can have a clear picture of individual fund performance, as well as your account. XIRR or extended internal rate of return is a measure of return which is used when multiple investments have been made at different points of time in a financial instrument like mutual funds. Just comparing Excel IRR (implemented by MSFT) and XIRR, we can infer that there are differences in the implementation. IRR has only two parameters: values and guess. Exploration of the differences and similarities between different rate of return measures, including absolute return, percentage return, simple annualized return, CAGR, IRR, and XIRR. Copyright © INSEAD 5 1. MWRR is designed to overcome this deficiency byOne of the formula to calculate the annualized returns of investment is as follows : Total Return = Final Amount – Initial Amount. XIRR is a formula that enables you to calculate your money-weighted rate of return. The money-weighted rate of return (MWRR) is the discount rate that equates a project’s present value cash flows to its initial investment. After cumulating all such period returns the annualized return is calculated. Only PMS performance reporting does. 12-22-2022 10:57 AM. TWRR and MWRR both offer valuable insight to investors. I am using XIRR calculation - dividends might be paid irregularly or I might get cash and reinvest dividends on random occasion. Global Investment Performance Standards (GIPS ®) for Firms Explanation of the Provisions in Section 2 February 2020((Annualised MWRR+1)^(total no. 8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Filled out, the XIRR function would look something like this: XIRR(E5:E12, G5:G12, 0%) Figure 2 shows the arrangement of the XIRR function as it appears in Google Sheets, with an additional explanation of each input. WHY PUBLIC AND PRIVATE SECURITIES RETURNS ARE REPORTED DIFFERENTLY TWRR (Time-Weighted Rate of Return) and IRR (Internal Rate of Return) are two commonly used methods to calculate investment returns. of the size or timing of contributions. The XIRR meaning is the returns earned by you over a period of time, and amount of all cash inflows/outflows, including dividends, capital gains, etc. Suppose. This is because the time-weighted return is only measuring the underlying performance of the shares held in the portfolio and not the actions of the investor buying. The MWRR results are noticeably different than the TWRR results from our first example. Which does a better job of measuring an investment manager's performance? Over 1. 56% versus +16. (IMHO, it is neither time-valued nor time-weighted. The ending date (i. XIRR stands for Extended Internal Rate of Return, a method used to calculate returns on investments. 5 year period is computed to be 26. TWRR does not take into account the distorting effects of the major fund transfers. 97%. Complexity. 98%. differences. TWRR: The return of an underlying investment that excludes the impact of any contributions or withdrawals made; R: The simple rate of return for a time period (EX: day, quarter, year)The TWRR isolates the portfolio’s performance and allows for comparisons across portfolios, making it a better reflection of the decisions made by the portfolio manager over the period. In such cases, you cannot use the IRR function. Return on investment (ROI) and internal rate of return (IRR) are both ways to measure the performance of investments or projects. XIRR is the right metric to understand what your actual. The main difference in IRR vs XIRR is that IRR deals with cash flows at regular. The XIRR formula is the modification of IRR (Internal Rate of Return) and factors irregular periods. The net present value of monthly loan repayments at the IRR is the same as the Loan amount. 5 years Profit Growth of Portfolio vs 5 Years profit growth of Sensex/Nifty. It is the case with monthly cash flows as the months of the year may contain 28, 29, 30 or 31 days. In the beginning, since regular valuations were not easy to come by, the MWR method was used because all your firm needed was 2 valuation periods, along with the cash flows, in order to generate the return. For multiple-lot holdings, the calculation uses all currently held lots (including those from dividend re-investment) as cash flows. 45%, which is a material difference! NPV = 200 ÷ (1 + 0. This takes input as the Zerodha funds statement as input to calculate XIRR. 5. 11) with an 11% guess. Use IRR when your cash flows are. Basis. e. 907% over the one year. How much Xirr is good for mutual fund? What is a Good XIRR in Mutual Funds? It’s difficult to determine what one would call a good XIRR, but usually, an XIRR of 12% on an equity mutual fund for an investment period of 10 years could be good enough. TWRR vs MWRR vs CAGR 年化報酬率CAGR 的問題在於，它通常只能處理單一筆現金流的情況，最初一次資金投入，到最後資金取出。 而TWRR、MWRR，則是處理多筆現金流的情況，包含多筆資金不同時間、不同金額的流入與流出情況。Then, for each sub-period, calculate the return rate by dividing the sum of the ending value and cash outflows by the sum of the beginning value and cash inflows minus one. 97% MWRR was significantly higher than his 10.