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- Title
Time-Weighted versus Dollar-Weighted Returns: A Glimpse into the Accuracy Debate.
- Authors
Grable, John E.; Chatterjee, Swarn
- Abstract
Reporting standards require mutual funds, indexes, and managed accounts to report annualized returns using time-weighted returns, which can be calculated using a geometric average. This column shows how time-weighted returns can be misleading and how advisors should also consider calculating dollar-weighted returns when measuring the performances of their clients' portfolios.
- Subjects
RATE of return; FINANCIAL performance; RATE of return on mutual funds; MANAGED accounts (Investments); MEASUREMENT; INDEX mutual funds
- Publication
Journal of Financial Service Professionals, 2014, Vol 68, Issue 5, p12
- ISSN
1537-1816
- Publication type
Article