Many may have heard of Time Weighted and Money Weighted. There continues to be confusion on what metric to use in performance measure. For retailers and typically investors I dare to say it has to be Money-weighted. I just read an article and reinforce my understanding that most users should only use Money-Weighted.

Time weighted by funds usage to me is quite misleading on performance over time if you read further down. Fortunately, when we says money weighted we are referring to XIRR in Excel.

Here's the table i extract from the article. (link )

Both methods have $1M injected by 2 parcels. Initial and mid June. Both losses 200K in the end. Logically performance should be negative at the end of the period. However MWR registered 146% good performance whereas XIRR registered -30%. Enough Said. Stick to XIRR (MWR) please.

If sales people tell you their fund performance is good, be wary. They

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