Why are we changing how we calculate portfolio performance?
At dub, we're constantly working to provide you with the most accurate and meaningful information about your investments. We'll be transitioning from time-weighted returns (TWR) to money-weighted returns (MWR) for your personal account performance calculations on 10/28. We believe that most dubbers will find a money-weighted return methodology to be more useful in analyzing their performance and the value they get from using Dub.
What are the main differences between time-weighted returns (TWR) and money-weighted returns (MWR)?
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Time-Weighted Returns (TWR):
- Measure the compound growth rate of investments over time
- Is preferred for portfolio comparisons because it eliminates the impact of cash flows, focusing solely on investment performance across different investment strategies.
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Money-Weighted Returns (MWR):
- Take into account the size and timing of cash flows
- Reflect the actual dollar return experienced by the investor, based on their specific cash flow decisions
How will this change impact my account values?
This switch will not affect your actual account balance or the value of your investments. It only changes how we calculate and display your portfolio's performance. You may notice different historical return percentages associated with your portfolios and accounts. These new figures will more closely reflect your personal investment outcomes.
Will I still be able to see my time-weighted returns?
While we're transitioning to money-weighted returns as the primary performance metric for users performance, time-weighted returns will still be used as performance data for portfolios as you shop for them given they help users better understand the performance of the strategy itself rather than the creators deposit or withdrawal behavior within the strategy.
Do I need to do anything to prepare for this change?
No action is required on your part. The change will be implemented automatically, and dub will notify you in app when the changes have been made.
If you have any further questions about this transition, please don't hesitate to reach out to our support team at support@dubapp.com.
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