Glossary · Performance and reporting
Dollar-weighted return
Dollar-weighted return, also called money-weighted or internal rate of return, measures the return the client actually earned, including the effect and timing of their own deposits and withdrawals.
Where time-weighted return evaluates the manager, dollar-weighted return evaluates the outcome. The two can differ substantially for a client with large or badly timed flows.
Most disputes about performance are really a disagreement about which of these two numbers the conversation is about.
Read more: Who owns the number? →
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