Two returns, one portfolio. And the one number that tells you which to trust.
Money-weighted vs time-weighted return — and whether the gap is large enough to act on.
Your brokerage dashboard shows you one return; a fund factsheet shows another. On the same money, the two can sit several points apart — or all but coincide. Time-weighted return measures the investment, with your deposit timing stripped out. Money-weighted return, the XIRR a spreadsheet gives you, measures your own result, timing and all. They only pull apart when a large contribution lands near a sharp market move; for steady monthly investing they barely differ. This calculator shows both figures on one cash-flow series, and tells you whether the difference is material for the way you actually invest. Everything is computed in your browser and never leaves this page.
Two honest answers to two different questions
When you put money in and take money out over time, "your return" stops being a single number. There are two right answers, and they answer different questions.
Time-Weighted Return (TWR) asks "how good was the investment?" It splits the period at each cash flow, measures each flow-free stretch on its own, and links those sub-period returns geometrically. Because each piece is a percentage, the amount of money present doesn't matter — so your deposit timing is removed. This is what fund factsheets quote and what the CFA curriculum and the GIPS performance standards require.
TWR = (1 + r₁) × (1 + r₂) × … × (1 + rₙ) − 1
Money-Weighted Return (MWR) asks "how well did I do, given my timing?" It is the internal rate of return — the single rate that makes the present value of every contribution, withdrawal and your closing balance net to zero. In a spreadsheet you'd reach for XIRR. It deliberately keeps your timing in, because your timing is part of your experience.
0 = Σₕ CFₕ ÷ (1 + MWR)^(tₕ ÷ 365) (solved for MWR)
Neither is the "true" return — they measure different things. A gap between them is normal and informative: it tells you whether your timing helped or hurt.
Worked example (the figure this tool reproduces)
Start R500 000 on 28 Feb. Pay in R10 000 on the 1st of each month; in August a R200 000 bonus lands (just before a strong second half); in November you withdraw R80 000. Close at R897 014.
TWR = +19.43% — the investment's own return, timing stripped out.
MWR (XIRR) = +25.90% — your personal return.
The MWR sits 6.46pp above the TWR because your big August deposit was working during the good months. Same portfolio, same trades — two honest numbers, because they answer two different questions. If your brokerage headlines the 25.90% and the fund quotes 19.43%, now you know why.
Why this matters for "is my brokerage's number accurate?"
Most brokerage and platform dashboards headline a money-weighted (personal) return. Most fund factsheets and indices quote a time-weighted return. So your dashboard number and the fund's number are often computed differently — and comparing them directly is apples-to-oranges. To judge whether a fund or manager beat the market, compare time-weighted to time-weighted. To understand your own lived result, look at the money-weighted figure.
When does the gap actually matter?
This is the question most "MWR vs TWR" explainers skip. The gap between your two numbers is the product of two things, and both have to be present for it to be large:
1. How concentrated your money is. If you drip in a steady amount each month, no single contribution dominates, so when you invested can't move the result much. If instead a big lump — a bonus, an inheritance, a property sale — lands in one go, that money is unevenly exposed to whatever the market does next.
2. How uneven the market was. In a flat, steady market, timing is irrelevant: every month earns roughly the same, so it doesn't matter when your money arrived. The gap only opens when returns are lumpy and your money was lumpy at the same time.
Concretely: with even R10,000/month contributions, the gap stays under a quarter of a percentage point even in a genuinely uneven market — immaterial. Put a lump sum worth about 40% of your portfolio in right before a strong stretch, and the gap jumps to roughly 7pp in your favour; put it in right before a downturn and it swings about 5pp against you. The size of the gap scales with the size of the lump: roughly 5% of your portfolio in one flow ≈ 3pp, and it climbs from there.
So the honest rule of thumb: if you invest steadily and your contributions are small relative to what's already invested, MWR and TWR will be within a point of each other and you can use either. The distinction earns its keep for lump-sum investors. This calculator tells you which camp your inputs fall into, rather than just showing two numbers and leaving you to wonder whether the difference is signal or noise.
Exact vs approximate TWR
TWR needs the portfolio value at each cash-flow date — that's why the table has a "value before flow" column. Fill it in for every flow and the TWR shown is exact, computed by geometric linking. Leave some blank and the calculator falls back to the Modified Dietz approximation for the gaps and labels the TWR approximate — it never presents an estimate as if it were exact. For an honest gap between TWR and MWR, supply the interim values: without them, the approximate TWR drifts toward your money-weighted return and the real timing effect is hidden.
Common questions
After reading this section, if you still have questions, feel free to contact us however you want.
What's the difference between money-weighted and time-weighted return?
Time-weighted return measures the investment itself, with your deposit and withdrawal timing removed — it's what you compare against an index. Money-weighted return (XIRR in a spreadsheet) measures your personal experience, timing included. TWR answers "how good was the investment?"; MWR answers "how well did I do, given my timing?".
Which one is my brokerage showing me?
Usually a money-weighted (personal) return, which is influenced by when you deposited. That's why it can differ from the fund's quoted time-weighted figure. Neither is wrong — they answer different questions.
Should I enter a fund switch or a reinvested dividend as a flow?
No. Only enter money that actually crossed your account boundary — money you paid in or took out. Selling one fund to buy another, or a dividend reinvested inside the account, moves nothing in or out, so entering it would corrupt both numbers.
Do my numbers leave my computer?
No. Every calculation runs in your browser. Nothing is uploaded, stored, or sent to a server — which also keeps it clean under POPIA.