MWR vs TWR: which one is your fund manager actually showing you?

When a fund manager reports a return, they are answering a question about themselves: was I any good? When you look at your own statement, you are asking a different question: did I do well? Those are not the same question, and the methods that answer them are not interchangeable. The fund's number is almost always time-weighted. Your experience is almost always money-weighted. Knowing which is which is the difference between judging a manager fairly and fooling yourself.

This is the conceptual core of the series. Our cornerstone, how investment return is actually calculated, carries the full worked example; this piece takes one facet deeper — why the reporting world settled on time-weighted return for managers, what you actually experience instead, and the one mistake that quietly contaminates the comparison.

Why managers are judged on time-weighted return

A fund manager does not control your cash flows. They cannot stop you depositing a bonus the week before a rally, or pulling money out the day before a recovery. If their reported return rose and fell with your deposit timing, it would measure your behaviour, not their skill.

Time-weighted return solves this by construction. It splits the period at each contribution and withdrawal, measures each flow-free stretch on its own, and links those sub-period returns together. Because each piece is a percentage, the amount of money present in any stretch is irrelevant — so your timing drops out entirely. What is left is the performance of the investment itself.

This is not a stylistic preference. It is the global standard, and it is required. The CFA Institute's Global Investment Performance Standards mandate a time-weighted return for exactly this reason: it "removes the effects of cash flows, which are generally client-driven," so a firm's reported figure "best reflects the firm's ability to manage the assets according to a specified strategy."[1] Every fund factsheet you have read quotes a time-weighted number because the standard obliges it to. When Allan Gray or Coronation publishes a fund return, that is the method underneath it.

So the answer to the title question, for the fund's published figure, is: time-weighted, nearly always.

What you actually experience

Your lived return is a different animal. You did choose when to invest and how much. That timing is part of your result — and the money-weighted return is the only measure that counts it.

Money-weighted return is the internal rate of return on your actual cash flows: the single rate that makes the present value of every contribution, every withdrawal and your closing balance net to zero. In a spreadsheet it is the XIRR function. It deliberately keeps your timing in, because your timing is the thing it measures.

This is also, increasingly, the number your platform shows you — as opposed to the fund's factsheet. Vanguard's and Fidelity's "personal rate of return" are money-weighted, and neither lets you switch.[2] So a common, confusing situation is this: your brokerage dashboard headlines a money-weighted figure (your timing baked in), the fund factsheet beside it quotes a time-weighted figure (your timing stripped out), and nothing on either screen says so. They can sit several points apart on identical money.

The gap, on one real portfolio

Numbers make this concrete. Take the portfolio from our cornerstone: R500,000 to start, R10,000 a month, a R200,000 bonus landing in August right before a strong second half, an R80,000 withdrawal in November. Run that one set of trades through both methods:[3]

• Time-weighted return: 19.43% — how the investment did.

• Money-weighted return: 25.90% — how the investor did.

A gap of 6.46 percentage points, on the same portfolio, in the same year. The investor's money-weighted figure is higher because most of their capital — the R200,000 — was working during the good months. Good timing, fairly rewarded. But notice what would happen if you used the wrong number for the wrong question: hold up that 25.90% personal figure as evidence the fund was excellent, and you would be crediting the manager for a well-timed bonus they had nothing to do with.

One honest caution, because the relationship is not a fixed rule of thumb. On a toy example — equal halves, one mid-point deposit — the annualised money-weighted return can actually land slightly below the time-weighted figure, because annualising compresses a late deposit's short holding period. The direction of the gap depends on whether your money was concentrated in the strong or weak stretch. Money-weighted is not "always higher." It is "sensitive to your timing," which is the whole point.

The mistake almost everyone makes

The error is never "money-weighted is the wrong metric" or "time-weighted is the wrong metric." Both are right for their own question. The error is using one to answer the other's question — and a single unlabelled percentage on a screen invites exactly that.

You cannot tell whether Coronation beat Ninety One by comparing two investors' money-weighted returns; those are contaminated by when each person deposited. And you cannot tell whether your own timing and discipline served you by looking at a fund-level time-weighted figure that deliberately erased your timing. Put plainly:

• To judge the fund or manager: time-weighted, net of fees, against a benchmark over a long-enough window. (We cover building that like-for-like comparison in a companion piece.)

• To judge yourself: money-weighted, your actual cash flows, your actual timing.

The honest concession

The sharpest objection to all of this is partly right, and worth stating in full rather than dodging. Sharesight — a serious portfolio tracker — argues that time-weighted return is "less useful and potentially misleading for individual investors, who do control when cash flows in and out of their portfolios." [4] They have a point. For judging your own performance, money-weighted return is the more relevant number, and people who insist individual investors should care about it are correct.

But that is an argument about which question matters to you, not about which method is valid. The people who say "individuals should care about money-weighted return" and the standards bodies that say "managers must report time-weighted return" are not in conflict. They are answering different questions and both answering correctly. The reason a single percentage on a screen misleads is that it silently picks one and lets you believe it settled both.

You need both numbers. Time-weighted to judge the fund. Money-weighted to judge yourself. Held together, they tell you something neither can alone: how much of your wealth's growth came from the investments, and how much from your own timing. (Where the two are close enough that the distinction does not matter for you, our calculator will say so — and for steady monthly investing, they usually are.)

The conclusion

Your fund manager is showing you a time-weighted return, because the standard requires the number that strips out your timing and isolates their skill. Your platform is probably showing you a money-weighted return, because that is your lived result. Neither is hiding anything; both are answering honestly. The work is yours: know which question you are asking, and read the number built for it. What no South African platform yet gives you is a true time-weighted return per fund on your own holdings — the figure you would need to know whether a manager actually earned their fee.

Rian Cronje comes to personal finance from the outside. After 25 years in corporate finance — Group Financial Controller roles, multi-currency consolidations and digital transformation, the unglamorous rigour of making a business's accounts actually reconcile — he found almost none of that discipline had reached the way individuals track their own wealth. He is not an advisor; he has nothing to sell you about where to put your money. He built Mintelo to close that gap: to hold a person's wealth to the standard a company holds its own books, and to break down the jargon that keeps capable people — him once included — locked out of their own numbers.

Sources

• CFA Institute, Global Investment Performance Standards (GIPS) — Guidance Statement on Calculation Methodology. gipsstandards.org (accessed 19 Jun 2026).

• Vanguard personal-rate-of-return help and Fidelity.com performance help, both confirming a money-weighted (IRR) personal figure, neither user-selectable (accessed 19 Jun 2026).

• Worked example re-verified 19 Jun 2026: TWR 19.4348%, MWR (XIRR) 25.8966%, gap 6.46pp. Full month-by-month table in Cornerstone 2.

• Sharesight, "Time-weighted vs. money-weighted rates of return," dated 17 Sep 2025. sharesight.com (accessed 19 Jun 2026).