How is the profit/loss calculated on my Altify account?
The profit/loss on your Altify account is calculated using the Time-Weighted Return (TWR) method. This method accounts for the timing of your investments and excludes the impact of any cash inflows or outflows to provide a fair assessment of investment performance.
This approach helps in comparing the performance of different investments over a specific period.
To calculate TWR we do the following:
Break down the measurement period into sub-periods, starting after a cash inflow/outflow and ending on the next cash flow day or the total period's end, whichever comes first.
Calculate the return for each sub-period, which is the ending value minus the beginning value and then divided by the beginning value.
Compound the sub-period returns together to get the TWR. You do this by adding 1 to each sub-period return, multiplying the results together, and then subtracting 1 from the final result.
This approach helps in comparing the performance of different investments over a specific period.
To calculate TWR we do the following:
Break down the measurement period into sub-periods, starting after a cash inflow/outflow and ending on the next cash flow day or the total period's end, whichever comes first.
Calculate the return for each sub-period, which is the ending value minus the beginning value and then divided by the beginning value.
Compound the sub-period returns together to get the TWR. You do this by adding 1 to each sub-period return, multiplying the results together, and then subtracting 1 from the final result.
Updated on: 30/11/2023
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