Calculating Your Money-Weighted Rate of Return (MWRR)

In Part 2 of his rate of return video series, Justin shows investors how to calculate their money-weighted rate of return (MWRR) and also explains how the MWRR differs from the time-weighted rate of return (TWRR).

Follow Justin Bender on


Follow PWL Capital on:

[JustinBenderCPM]

100% of YouTube revenues received by the Canadian Portfolio Manager channel have been donated to SickKids Foundation.
If this video has helped save you a few dollars on fees or taxes, please consider donating a portion of your savings to SickKids Foundation:

[Pieter]

Excellent explanation; much more clear than how this is explained in the CFA curriculum.

[danielbarrett]

The best explanation of MWRR I have ever heard, thanks!

[hishamalhashmi]

very clear when you watch the two videos

[shaikshb]

well articulated with examples. Thank you Justin.

[legomgom]

Thanks for doing this, very clear! As a nerd I guess I would have loved to see the math in the same way you did for time weighted rate of return, but still thanks so much!

[AurelioPita]

Great explanation. Many thanks. Subscribed.

[vijayreddy]

such an awesome teacher you are. liked and subbed

[chariscchi]

Thank you very much again as it helps me to understand more re calculating for the rate of return. May i ask you when it's Cash Portfolio, holding term deposits and Term Annuities, what would be the appropriate method to calculate the performance returns of this cash portfolio

[Kritikanbringer]

Does Excel actully deal correctly with the time/date input column?

[boojiboy]

I don't understand the point of MWRR. What can I do with the figure it calculates? I have an account that shows 15% growth using MWRR but ust 8% simply comparing nd value to initial. With the 8% figure I can compare the performance to other things such as savings accounts but the 15% figure??? it takes into account investment timing but can't predict when to invest. What do I use the 15% for??

[skube]

Is it not a strange choice of the CSA to make MWRR the standard?

[stim]

Let's say we adopt a practice of using Money weighted return, and then we recieved a substantial cash flow for one month causing performance to be skewed for the 1 year performance. For that skewed one month period, is it okay revert to time weighted return to capture the true performance...just for this time period?

[lpgoog]

Excellent presentation! MWRR seems like an important consideration for investors especially when measuring their wealth advisor’s performance. Probably why they include it as part of the CRM2 year end statement. Here’s something I never read about: Question: What is the opportunity cost of the wealth advisor’s fee coming out of accounts? Example: Dividends and capital gains reinvested vs. systematically taking out fees from the firm/advisor. Seems costly over time even at 1%. Wouldn’t it be more prudent to pay an advisor separately and let investments compound at their maximum over time?

[lh]

Can you calculate it using financial calculator ?

[userm]

Hey Justin, if I calculate the MWRR per year, 2020, 2021, etc -> how with this MWRR of each year I can calculate my cumulative total return of all my portafolio since day 1?

I have my personal portafolio and each month I make contributions

Thanks in advance 🤗

[dxelson]

How does this apply if I sometimes have cash on my brokerage account and my contributtions are actually cash deposits into the brokerage account to be invested in a later date? Ex: I deposit $3000 every 6 months (equivalent to $500/month), after I deposit this money slowly invest that money up to $500 per month, if i encounter a huge dip i may invest more than $500 or even all of the remaining cash. If i end up with no cash i just wait until the 6 months are up and repeat depositing $3000. I do this to reduce deposit fees, ideally i would invest monthly, but I rather pay fees twice a year than 12 times a year.

[dmehta]

Why don’t you help make a spreadsheet for retail investors where we can calculate stocks return With MWRR

[thechickenduck]

Why does the Excel tutorial on that XIRR function say the starting amount needs to be negative? (the one from Microsoft Help)

[maximeleroux]

I still think Micahel should have been Gob, and Gob should have been Michael, cuz Michael is the smart one