MWRR/XIRR is a different way of measuring your returns compared to the traditional TWRR/CAGR. Both have their strengths and each has its weaknesses.
There are usually a few prevalent ways to see if your portfolio or net wealth is performing well, versus others.
But the most common debate has been Time-Weighted Rate of Return (TWRR) and Money-Weighted Rate of Return (MWRR).
Another name for MWRR is also the Extended Internal Rate of Return (XIRR). TWRR is also known as Compounded Average Growth Rate (CAGR).
The performance difference between TWRR and MWRR is based on what has a heavier weight
TWRR/CAGR: Weighted more heavy to time. So those transactions that are older, their performance will matter more than those transactions that are youngerMWRR/XIRR: Weighted more heavy to money. So those transactions that are larger in value, their performance will matter more than those transactions that are smaller in valueSo which one
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