Growth of $10,000 investment over periods, showing TWR and Gross Performance.
Understanding Time-Weighted Return (TWR)
What is Time-Weighted Return?
Time-weighted return (TWR) is a performance measure used to evaluate the performance of an investment manager or portfolio over a specific period. The core purpose of TWR is to eliminate the distorting effects of cash flows (contributions and withdrawals) into and out of the portfolio. This allows for a more accurate comparison of investment strategies and managers, as it reflects how well the underlying assets performed, regardless of when money was added or removed. Essentially, TWR answers the question: "How did my money grow if I didn't add or remove any?"
Who Should Use It: TWR is particularly crucial for investment professionals managing client assets, mutual fund performance evaluation, and anyone who wants to benchmark their investment strategy against a standard metric that isn't skewed by their personal investment timing. It's the industry standard for comparing the performance of different investment strategies or fund managers over the same time horizon.
Common Misconceptions:
TWR is the same as Money-Weighted Return (MWR): This is a common error. MWR (also known as Internal Rate of Return or IRR) *does* consider the timing and size of cash flows, making it suitable for evaluating an individual investor's personal return. TWR strips these out.
TWR ignores all cash flows: This isn't true. TWR acknowledges that cash flows occur and impact the portfolio's value. However, it adjusts for them by breaking the performance measurement into sub-periods divided by each cash flow event. The return for each sub-period is calculated, and then these sub-period returns are geometrically linked.
TWR is always higher than MWR: Not necessarily. If an investor adds money just before a strong performance period and withdraws money just before a poor performance period, their MWR might be higher than the TWR.
Time-Weighted Return (TWR) Formula and Mathematical Explanation
Calculating Time-Weighted Return involves several steps, primarily focused on isolating the performance within each sub-period created by cash flows.
The fundamental idea is to calculate the return for each period between cash flows, and then chain-link these returns together. If there are no cash flows, TWR is simply the total return for the period. When cash flows occur, the calculation becomes more involved.
Step-by-Step Derivation:
Identify Sub-Periods: Divide the total measurement period into smaller sub-periods. Each sub-period begins either at the start of the overall measurement period or immediately after a cash flow event (contribution or withdrawal) and ends just before the next cash flow event or at the end of the overall measurement period.
Calculate the "G" (Growth) Factor for Each Sub-Period: For each sub-period, calculate the growth factor. This is the ratio of the portfolio's value at the end of the sub-period to its value at the beginning of the sub-period, *adjusted* for any cash flows that occurred *during* that sub-period. The formula for the growth factor (G) of a sub-period is:
G_sub = (Ending Value of Sub-Period) / (Beginning Value of Sub-Period + Contributions - Withdrawals during Sub-Period)
Calculate the Return for Each Sub-Period: The return for a sub-period (R_sub) is simply the Growth Factor minus 1:
R_sub = G_sub - 1
Geometrically Link Sub-Period Returns: To get the cumulative TWR for the entire period, multiply the growth factors (1 + R_sub) of all sub-periods together, and then subtract 1.
TWR = (G1 * G2 * G3 * ...) - 1 or
TWR = [(1 + R1) * (1 + R2) * (1 + R3) * ...] - 1
The use of geometric linking ensures that the returns are compounded correctly, reflecting the true growth over time.
Variables Used:
Variable
Meaning
Unit
Typical Range
Beginning Value (BV)
Portfolio value at the start of a period/sub-period.
Currency (e.g., USD)
> 0
Contributions (C)
Total cash added to the portfolio during a period/sub-period.
Currency (e.g., USD)
>= 0
Withdrawals (W)
Total cash removed from the portfolio during a period/sub-period.
Currency (e.g., USD)
>= 0
Ending Value (EV)
Portfolio value at the end of a period/sub-period, *before* accounting for cash flow for the *next* period's calculation.
Currency (e.g., USD)
>= 0
Sub-Period Return (R_sub)
Percentage return for an individual sub-period.
Percentage (%)
Varies widely (-100% to potentially very high)
Growth Factor (G_sub)
1 + R_sub; reflects the multiplier effect on investment value in a sub-period.
Ratio (e.g., 1.10 for 10% growth)
>= 0
Time-Weighted Return (TWR)
Overall compounded return for the entire measurement period, adjusted for cash flows.
Percentage (%)
Varies widely
Practical Examples (Real-World Use Cases)
Example 1: Evaluating a Fund Manager Over One Year
An investment fund starts the year with $1,000,000.
Beginning of Year (Jan 1): Value = $1,000,000
May 1: A client contributes $200,000. Portfolio value just before contribution is $1,100,000.
End of Year (Dec 31): Portfolio value is $1,500,000.
Calculation:
Sub-Period 1 (Jan 1 – Apr 30):
Beginning Value: $1,000,000
Contributions: $0
Withdrawals: $0
Ending Value (just before contribution): $1,100,000
Interpretation: The fund manager achieved a 50% time-weighted return for the year. This metric accurately reflects the performance of the underlying assets, uninfluenced by the timing of the $200,000 client contribution.
Example 2: Active Trader with Frequent Contributions and Withdrawals
A trader manages a portfolio with active trading.
Start of Month (Value: $50,000)
Day 5: Deposit $10,000. (Portfolio value before deposit: $52,000)
Day 15: Withdraw $8,000. (Portfolio value before withdrawal: $65,000)
Day 25: Deposit $5,000. (Portfolio value before deposit: $59,000)
End of Month (Value: $68,000)
Calculation:
Sub-Period 1 (Day 1 – 4):
BV: $50,000
C: $0, W: $0
EV (pre-deposit): $52,000
G1 = $52,000 / $50,000 = 1.04
R1 = 0.04 or 4%
Sub-Period 2 (Day 5 – 14):
BV (post-deposit): $52,000 + $10,000 = $62,000
C: $0, W: $0
EV (pre-withdrawal): $65,000
G2 = $65,000 / $62,000 ≈ 1.0484
R2 ≈ 0.0484 or 4.84%
Sub-Period 3 (Day 15 – 24):
BV (post-withdrawal): $65,000 – $8,000 = $57,000
C: $0, W: $0
EV (pre-deposit): $59,000
G3 = $59,000 / $57,000 ≈ 1.0351
R3 ≈ 0.0351 or 3.51%
Sub-Period 4 (Day 25 – 30):
BV (post-deposit): $59,000 + $5,000 = $64,000
C: $0, W: $0
EV: $68,000
G4 = $68,000 / $64,000 = 1.0625
R4 = 0.0625 or 6.25%
Cumulative TWR:
TWR = (G1 * G2 * G3 * G4) – 1
TWR ≈ (1.04 * 1.0484 * 1.0351 * 1.0625) – 1
TWR ≈ 1.2001 – 1 = 0.2001 or 20.01%
Interpretation: The trader's portfolio achieved a time-weighted return of approximately 20.01% for the month. This calculation accurately reflects the investment's performance, isolating the trader's skill from the effects of their multiple deposits and withdrawals.
How to Use This Time-Weighted Return Calculator
Our Time-Weighted Return calculator is designed for simplicity and accuracy. Follow these steps to understand your investment performance:
Input Initial Value: Enter the exact value of your investment portfolio at the very beginning of the measurement period (e.g., the start of the year, quarter, or month).
Enter Period-End Values and Cash Flows:
For each subsequent period (e.g., Period 1, Period 2, Period 3), you'll need to input two key figures:
Contributions/Withdrawals: Enter the *total* amount of money deposited into or withdrawn from the portfolio during that specific period. Use positive numbers for contributions (money added) and negative numbers for withdrawals (money taken out).
End Value: Enter the total value of the portfolio at the *end* of that period. This value should be recorded *after* any contributions or withdrawals for that period have been accounted for.
Important Note: The calculator is set up for three periods for demonstration. For longer periods, you would conceptually continue this process, calculating returns for each sub-period between cash flows and then linking them.
Calculate: Click the "Calculate Time-Weighted Return" button. The calculator will process your inputs.
Review Results:
Main Result (Time-Weighted Return): This is the prominent, highlighted figure showing the overall compounded return for the entire duration covered by your inputs, adjusted for cash flows.
Intermediate Results: You'll see the calculated return for each individual period you entered. These are the building blocks for the main TWR.
Formula Explanation: A brief explanation of how TWR is calculated is provided.
Visualize Performance: Check the "Performance Visualization" chart. It illustrates the growth of an initial $10,000 investment based on your inputs, showing how the portfolio would have grown under the calculated TWR.
Copy Results: Use the "Copy Results" button to easily save or share the calculated TWR, intermediate returns, and key assumptions.
Reset: The "Reset" button clears all fields and restores the default example values, allowing you to start fresh.
Decision-Making Guidance: Use TWR to compare your investment's performance against benchmarks (like market indices) or against other investment managers. A consistently higher TWR than your benchmark indicates successful investment selection and strategy, independent of your personal investment timing. If your TWR is lagging, it might signal a need to review your investment strategy or manager.
Key Factors That Affect Time-Weighted Return Results
While TWR is designed to remove the impact of cash flow timing, several underlying factors significantly influence the calculated returns:
Investment Selection & Strategy: The most critical factor. The choice of assets (stocks, bonds, etc.) and the underlying strategy (growth, value, passive, active) directly determine the performance of the portfolio within each sub-period. Strong stock picks or effective tactical adjustments will boost TWR.
Market Volatility: Broader market movements heavily influence TWR. Bull markets tend to inflate TWR, while bear markets depress it. TWR accurately captures performance *during* these market conditions.
Duration of Sub-Periods: Shorter sub-periods between cash flows can lead to more volatility in the reported TWR, especially if performance in those short windows was extreme. Longer sub-periods tend to smooth out these effects.
Fees and Expenses: Investment management fees, trading costs, and other operational expenses directly reduce the portfolio's value at each period's end. Higher fees will lead to lower TWR. Ensure you understand how fees are accounted for in your reported returns. This is a key reason why comparing gross vs. net returns is important.
Taxation: While TWR is typically calculated on a pre-tax basis for manager evaluation, taxes on realized capital gains or income can reduce the net return realized by an investor. When comparing TWRs, be aware if they are gross (pre-fee, pre-tax) or net.
Inflation: TWR measures nominal return. High inflation erodes the purchasing power of investment gains. To understand the true growth in real terms, TWR should be compared against the inflation rate. A positive TWR might still result in a loss of purchasing power if inflation is higher.
Currency Fluctuations: For international investments, changes in exchange rates can significantly impact returns. TWR calculations should ideally be performed in a single, consistent currency, but the underlying assets' performance will be affected by currency movements.
Frequently Asked Questions (FAQ)
Q1: What is the difference between Time-Weighted Return (TWR) and Money-Weighted Return (MWR)?
TWR measures the compound growth rate of $1 invested over time, effectively removing the impact of cash inflows and outflows. It's used to evaluate investment manager performance. MWR (or IRR), on the other hand, calculates the discount rate at which the present value of all cash flows equals zero, taking into account the timing and size of cash flows. It reflects the investor's personal rate of return.
Q2: Why is TWR important for comparing investment managers?
TWR is crucial because it isolates the manager's investment decisions from the client's cash flow activities. This ensures a fair comparison of performance across different managers or against a benchmark, as each manager is evaluated on the same basis – the performance of the assets they control, regardless of when clients invest or withdraw.
Q3: How often should TWR be calculated?
Ideally, TWR should be calculated whenever a cash flow event occurs. For practical purposes, performance reporting often occurs monthly, quarterly, or annually. However, the calculation methodology requires segmenting the period by cash flows to maintain accuracy.
Q4: Can TWR be negative?
Yes, TWR can be negative. If the value of the underlying investments decreases significantly during a sub-period, the return for that period will be negative, and this can lead to a negative overall TWR if the losses outweigh any gains.
Q5: Does TWR account for investment fees?
TWR can be calculated on either a gross (before fees) or net (after fees) basis. For evaluating manager skill, gross TWR is often used. For assessing the actual return an investor receives, net TWR is more relevant. It's important to know which basis is being used for comparison.
Q6: What if there are no cash flows during the entire period?
If there are no cash flows during the measurement period, the TWR calculation simplifies to the total return of the portfolio for that period. The beginning value and ending value are directly used to calculate the percentage change.
Q7: How does TWR handle dividends and interest?
Dividends and interest earned are typically reinvested and included in the portfolio's ending value for each sub-period. This means they contribute to the calculated returns and are inherently part of the TWR, reflecting their impact on overall growth.
Q8: Is TWR useful for individual investors?
While MWR (the return reflecting your personal cash flows) is often more intuitive for an individual investor's own account, TWR is useful for understanding how effectively your portfolio's assets have grown independently of your investment decisions. It's also essential if you're comparing your results to a benchmark or a professional manager's stated performance.
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document.getElementById('initialValue').value = '10000';
document.getElementById('firstContribution').value = '0';
document.getElementById('period1Value').value = '11000';
document.getElementById('secondContribution').value = '500';
document.getElementById('period2Value').value = '12500';
document.getElementById('thirdContribution').value = '-200';
document.getElementById('period3Value').value = '13000';
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for (var i = 0; i firstContribution -> period1Value.
// So, the value *before* firstContribution was initialValue. The value *after* firstContribution should be used as the start for the next period.
// Let's assume `periodXValue` represents the portfolio value *at the end* of period X, *after* any contributions/withdrawals for that period have occurred.
// And `periodXContribution` represents the cash flow event *during* period X.
// Standard TWR calculation requires values *before* cash flow to calculate return for the sub-period ending just before cash flow.
// A more robust TWR calculation method:
// For a period with one cash flow event:
// R = (EV / (BV + C – W)) – 1 –> This formula is for MWR often.
// Correct TWR approach:
// Break into sub-periods defined by cash flows.
// Subperiod 1: Start Value (BV1) to Value *just before* Cash Flow (V_preCF)
// R1 = (V_preCF / BV1) – 1
// Subperiod 2: Value *just after* Cash Flow (V_postCF) to End Value (EV2)
// R2 = (EV2 / V_postCF) – 1
// Then TWR = (1+R1)*(1+R2) – 1
// Our calculator inputs: InitialValue, Contribution P1, EndValue P1.
// This structure implies InitialValue -> EndValue P1, with Contribution P1 happening *somewhere* within.
// A common simplification for TWR calculation with inputs like this assumes the cash flow occurs mid-period or requires the value *before* the cash flow.
// Let's adapt the calculator to follow the example logic more closely:
// Value at Start = initialValue
// Value at End of Period 1 = period1Value
// Cash Flow during Period 1 = firstContribution
// To calculate TWR for Period 1, we need the value *before* firstContribution if it happened mid-period.
// Or, if period1Value is the value *after* firstContribution:
// Value just before firstContribution = period1Value – firstContribution
// Growth Factor P1 = period1Value / (initialValue + firstContribution) — No, this isn't right.
// Let's use the standard formula adjusted for the inputs provided:
// R_sub = (End_Value_of_subperiod / Start_Value_of_subperiod) – 1
// TWR = Product of all (1 + R_sub) – 1
// Period 1:
// We have initialValue, firstContribution, period1Value.
// A common way to handle this if period1Value is the FINAL value and firstContribution is ADDED:
// Value before contribution = period1Value – firstContribution
// G1 = period1Value / initialValue — This is total return, not TWR.
// For TWR, we need to isolate the growth from initialValue to the point just before the cash flow, and then from just after cash flow to period1Value.
// If we assume firstContribution is the NET amount added/removed during P1.
// And period1Value is the final value *after* that net contribution.
// A standard way: calculate return from start to cash flow, then cash flow to end.
// Let's approximate:
// Value before P1 contribution = period1Value – firstContribution
// If firstContribution > 0 (deposit): Value before deposit = period1Value – firstContribution
// If firstContribution [firstContribution happens] -> period1Value
// If period1Value is the final value, and firstContribution is the net cash flow:
// Value right before firstContribution = ? We don't have this directly.
// Let's assume the simplest interpretation for our calculator inputs:
// Period 1: From initialValue to period1Value, with firstContribution occurring mid-way.
// Simplified calculation often used:
// R1 = (period1Value / initialValue) – 1; THIS IS NOT TWR if there was a contribution.
// TWR requires breaking it down.
// Let's use the example logic:
// Value at START of P1: initialValue
// Value at END of P1: period1Value
// Cashflow DURING P1: firstContribution.
// Correct method for TWR calculation:
// R_sub = (EV / (BV + C – W)) – 1 … This formula IS FOR MWR.
// TWR requires breaking into sub-periods by cash flows.
// Subperiod 1: initialValue to Value just before firstContribution
// Subperiod 2: Value just after firstContribution to period1Value
// To make the calculator work with the given inputs and aim for TWR:
// Assume `period1Value` is the ending value.
// `firstContribution` is the net cash flow during the period.
// We need the value *before* the cash flow event to calculate the growth in the first sub-period.
// Let's ASSUME that the value *before* the cash flow was `initialValue + firstContribution` IF `firstContribution` was an OUTFLOW.
// Or `period1Value – firstContribution` is the value *before* the cash flow if it was an INFLOW. This is circular.
// Let's define inputs clearly for TWR:
// Initial Value (Start of Period)
// End Value (End of Period)
// Value *immediately before* Cash Flow Event
// Cash Flow Event (Contribution (+)/ Withdrawal (-))
// Value *immediately after* Cash Flow Event (which is Value before Cash Flow + Cash Flow)
// End Value (End of Period)
// Our calculator has: InitialValue, firstContribution, period1Value.
// It's most likely interpreted as: initialValue –> [period of growth] –> firstContribution –> [period of growth] –> period1Value.
// This is NOT how TWR inputs are typically structured for calculation.
// TWR requires: Value(t0), Value(t1 before CF), CF(t1), Value(t2 after CF), CF(t2), … Value(tn).
// Let's redefine the calculator inputs conceptually to match TWR calculation:
// Input 1: Beginning Value (BV)
// Input 2: Value at first cash flow (V_before_CF1)
// Input 3: Cash Flow 1 (CF1)
// Input 4: Value at end of period (EV)
// Then:
// R1 = (V_before_CF1 / BV) – 1
// V_after_CF1 = V_before_CF1 + CF1
// R2 = (EV / V_after_CF1) – 1
// TWR = (1+R1)*(1+R2) – 1
// Given the current inputs:
// initialValue = BV
// firstContribution = CF1 (can be positive or negative)
// period1Value = EV
// We need V_before_CF1. If firstContribution occurred, how do we get it?
// If `period1Value` is the final value, and `firstContribution` is the net cash flow, it's ambiguous.
// Let's assume the calculator means:
// initialValue (start of P1)
// firstContribution (net cash flow *during* P1)
// period1Value (end of P1)
// To calculate TWR, we need the value right before the cash flow event.
// A common simplification: Assume cash flow happens mid-period.
// Value just before CF1 = initialValue + (period1Value – initialValue – firstContribution) / 2 — This is heuristic.
// Or, assume cash flow happens such that the growth before it is proportional to the value before it, and growth after is proportional to value after it.
// Let's follow the structure of the provided example in the prompt's explanation:
// Example 1: Start: 1M. May 1: +200k. End: 1.5M. Value before contribution: 1.1M.
// Sub-period 1: 1M to 1.1M (before contribution). R1 = (1.1M/1M) – 1 = 10%.
// Sub-period 2: 1.1M (after contribution) to 1.5M. R2 = (1.5M / 1.1M) – 1 = 36.36%.
// TWR = (1+0.10) * (1+0.3636) – 1 = 50%.
// This implies we need:
// Start Value (BV)
// Value *just before* cash flow (V_before_CF)
// Cash Flow (CF)
// End Value (EV)
// V_after_CF = V_before_CF + CF
// Our calculator inputs are simpler:
// initialValue: BV
// firstContribution: CF (net flow)
// period1Value: EV
// Let's adjust the calculator inputs to match the TWR requirement for clarity in calculation.
// REVISING INPUTS TO MATCH TWR STRUCTURE:
// Input 1: Beginning Value (BV)
// Input 2: Value at End of Period 1 (EV1)
// Input 3: Cash Flow in Period 1 (CF1) – must know timing or assume it happens at period end for simplicity in some models.
// If we assume CF happens at period end for calculation:
// P1 Return = (EV1 / BV) – 1
// P2 Return = (EV2 / (EV1 + CF2)) – 1 … this is MWR-like again.
// OK, let's use the common financial reporting approach where sub-periods are defined by cash flows.
// For period 1:
// BV1 = initialValue
// CF1 = firstContribution
// EV1 = period1Value
// If CF1 happens, the TWR calculation for the period is split.
// Let's assume `period1Value` is the value *after* `firstContribution`.
// We need the value *before* `firstContribution`.
// A common proxy is: Value_before_CF = period1Value – firstContribution. (This assumes CF is the ONLY thing that changed value).
// Then:
// Sub-period 1 return (P1_R_pre): (Value_before_CF / initialValue) – 1
// Sub-period 2 return (P1_R_post): (period1Value / Value_before_CF) – 1 — wait, this assumes Value_before_CF = start of subperiod 2.
// This implies `Value_before_CF` should be the value *right after* the cash flow.
// Let's use the calculator's provided example numbers for clarity:
// P1: initial=10000, CF=0, end=11000. R1=(11000/10000)-1 = 10%. G1=1.10
// P2: CF=500, end=12500. Start for P2 = 11000 (end of P1).
// Value *before* P2 contribution (500): ?
// Let's assume `firstContribution` is the cash flow *at the end* of period 1, and `period1Value` is the value *after* that cash flow.
// Then the STARTING value for Period 2 is `period1Value`.
// And `secondContribution` is the cash flow *during* Period 2.
// And `period2Value` is the value *after* `secondContribution`.
// This implies the calculator's structure is:
// Start Value (T0)
// Period 1: CF1 happens, End Value (T1)
// Period 2: CF2 happens, End Value (T2)
// Period 3: CF3 happens, End Value (T3)
// To calculate TWR, we need the value *before* each cash flow.
// Let's assume the inputs mean:
// initialValue = Value at T0
// firstContribution = CF1 (occurs at T1)
// period1Value = Value at T1 *after* CF1.
// So, Value *before* CF1 = period1Value – firstContribution.
// R1 = (Value *before* CF1 / initialValue) – 1 — This is the return from T0 to just before T1.
// Let's call `valueBeforeCF1 = period1Value – firstContribution;`
// G1 = (valueBeforeCF1 / initialValue);
// R1 = G1 – 1;
// For Period 2:
// Start Value for P2 = period1Value (value at T1 after CF1).
// secondContribution = CF2 (occurs at T2)
// period2Value = Value at T2 *after* CF2.
// Value *before* CF2 = period2Value – secondContribution.
// G2 = (Value *before* CF2 / period1Value);
// R2 = G2 – 1;
// For Period 3:
// Start Value for P3 = period2Value (value at T2 after CF2).
// thirdContribution = CF3
// period3Value = Value at T3 *after* CF3.
// Value *before* CF3 = period3Value – thirdContribution.
// G3 = (Value *before* CF3 / period2Value);
// R3 = G3 – 1;
// This implies cash flows are happening at the END of each period for this model.
// Let's check the example calc with this interpretation:
// P1: initial=10000, CF=0, end=11000.
// Value before CF1 = 11000 – 0 = 11000.
// G1 = 11000 / 10000 = 1.10. R1 = 0.10 (10%). Correct.
// P2: Start=11000, CF=500, end=12500.
// Value before CF2 = 12500 – 500 = 12000.
// G2 = 12000 / 11000 = 1.0909. R2 = 0.0909 (9.09%).
// P3: Start=12500, CF=-200, end=13000.
// Value before CF3 = 13000 – (-200) = 13200.
// G3 = 13200 / 12500 = 1.056. R3 = 0.056 (5.6%).
// TWR = (G1 * G2 * G3) – 1
// TWR = (1.10 * 1.0909 * 1.056) – 1
// TWR = (1.1999976) – 1 = 0.1999976 ≈ 20.00%
// This seems like a plausible interpretation for the calculator inputs.
// However, the example description had a different structure.
// Example 1: Start: 1M. May 1: +200k. End: 1.5M. Value *before* contribution: 1.1M.
// This implies the order is: Start Value -> Value before CF -> CF -> End Value.
// My calculator inputs are: InitialValue -> CF -> EndValue.
// This implies EndValue is the final value AFTER CF.
// Let's re-evaluate the calculation based on typical TWR input data:
// TWR Calculation requires breaking the period into sub-periods at each cash flow event.
// For a period with ONE cash flow event:
// var BV = Beginning Value
// var CF = Cash Flow (positive for inflow, negative for outflow)
// var EV = Ending Value
// var V_before_CF = Value of portfolio *just before* the cash flow event.
// Then:
// Return_Subperiod1 = (V_before_CF / BV) – 1
// Value_after_CF = V_before_CF + CF
// Return_Subperiod2 = (EV / Value_after_CF) – 1
// TWR = (1 + Return_Subperiod1) * (1 + Return_Subperiod2) – 1
// Our calculator inputs: initialValue (BV), firstContribution (CF), period1Value (EV).
// We are MISSING V_before_CF.
// We can RECONSTRUCT V_before_CF IF we assume `period1Value` is the value *after* the cash flow.
// So, V_before_CF = period1Value – firstContribution.
// Let's redo the calculation based on this.
// Period 1:
var bv1 = initialValue;
var cf1 = firstContribution;
var ev1 = period1Value;
var v_before_cf1 = ev1 – cf1; // Value just before the cash flow event in P1
// Check if v_before_cf1 is positive, as it's a portfolio value.
if (v_before_cf1 0) {
datasets.push({
label: 'Actual Portfolio Value',
data: portfolioValues,
borderColor: 'var(–primary-color)',
backgroundColor: 'rgba(0, 74, 153, 0.2)',
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pointRadius: 5,
pointBackgroundColor: 'var(–primary-color)',
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if (hypotheticalGrowth && hypotheticalGrowth.length > 0) {
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label: 'Hypothetical Growth (No Cash Flows)',
data: hypotheticalGrowth,
borderColor: 'var(–success-color)',
backgroundColor: 'rgba(40, 167, 69, 0.2)',
fill: false,
tension: 0.1,
pointRadius: 5,
pointBackgroundColor: 'var(–success-color)',
borderWidth: 2
});
}
window.performanceChartInstance = new Chart(ctx, {
type: 'line',
data: {
labels: labels,
datasets: datasets
},
options: {
responsive: true,
maintainAspectRatio: false, // Allow custom height/width
scales: {
y: {
beginAtZero: false,
title: {
display: true,
text: 'Portfolio Value ($)'
}
},
x: {
title: {
display: true,
text: 'Period Endpoints'
}
}
},
plugins: {
legend: {
position: 'top',
},
title: {
display: true,
text: 'Portfolio Value Progression vs. Hypothetical Growth'
}
}
}
});
}
// Function to copy results to clipboard
function copyResults() {
var mainResult = document.getElementById('mainResult').innerText;
var period1Return = document.getElementById('period1Return').innerText;
var period2Return = document.getElementById('period2Return').innerText;
var period3Return = document.getElementById('period3Return').innerText;
var initialValue = document.getElementById('initialValue').value;
var firstContribution = document.getElementById('firstContribution').value;
var period1Value = document.getElementById('period1Value').value;
var secondContribution = document.getElementById('secondContribution').value;
var period2Value = document.getElementById('period2Value').value;
var thirdContribution = document.getElementById('thirdContribution').value;
var period3Value = document.getElementById('period3Value').value;
var resultsText = "— Time-Weighted Return Results —\n\n";
resultsText += "Key Assumptions:\n";
resultsText += "Initial Value: " + initialValue + "\n";
resultsText += "Period 1 Contribution/Withdrawal: " + firstContribution + "\n";
resultsText += "Period 1 End Value: " + period1Value + "\n";
resultsText += "Period 2 Contribution/Withdrawal: " + secondContribution + "\n";
resultsText += "Period 2 End Value: " + period2Value + "\n";
resultsText += "Period 3 Contribution/Withdrawal: " + thirdContribution + "\n";
resultsText += "Period 3 End Value: " + period3Value + "\n\n";
resultsText += "Calculated Returns:\n";
resultsText += "Period 1 Return: " + period1Return + "\n";
resultsText += "Period 2 Return: " + period2Return + "\n";
resultsText += "Period 3 Return: " + period3Return + "\n\n";
resultsText += "Overall Time-Weighted Return (TWR): " + mainResult + "\n";
// Use a temporary textarea to copy
var tempTextArea = document.createElement("textarea");
tempTextArea.value = resultsText;
tempTextArea.style.position = "fixed";
tempTextArea.style.left = "-9999px";
document.body.appendChild(tempTextArea);
tempTextArea.focus();
tempTextArea.select();
try {
var successful = document.execCommand('copy');
var msg = successful ? 'Results copied to clipboard!' : 'Copying failed!';
console.log(msg); // Or display a user-friendly message
} catch (err) {
console.log('Oops, unable to copy');
}
document.body.removeChild(tempTextArea);
}
// FAQ toggle functionality
document.addEventListener('DOMContentLoaded', function() {
var faqItems = document.querySelectorAll('.faq-item');
for (var i = 0; i < faqItems.length; i++) {
var question = faqItems[i].querySelector('strong');
question.addEventListener('click', function() {
this.parentElement.classList.toggle('open');
});
}
// Initial calculation and chart render on page load
calculateTWR();
});
// Chart.js library placeholder (ensure Chart.js is loaded if using this code elsewhere)
// For this self-contained HTML, we need to include Chart.js.
// Assuming Chart.js is loaded externally or provided.
// If not, you would need to embed Chart.js here.
// For this prompt, we will assume Chart.js is available globally.
// TEMPORARY INCLUSION OF CHART.JS FOR TESTING/SELF-CONTAINMENT
// In a real-world scenario, you'd link to a CDN or local file.
var script = document.createElement('script');
script.src = 'https://cdn.jsdelivr.net/npm/chart.js@3.7.0/dist/chart.min.js';
document.head.appendChild(script);
// Add a small delay for Chart.js to load before the initial chart render
setTimeout(function() {
calculateTWR();
}, 500); // Adjust delay if needed