If someone holds an investment on 1 Jan 2021, it's easy to see how much the percentage growth is on 31 December 2021 if there were no contributions/withdrawals during the period (100x final-initial / initial).
If someone added money to their investment, my opinion is that a time-weighting is now necessary in order to more fairly and accurately consider that additional money into the investment. Equally, the same applies to withdrawals. To tackle this, I am using XIRR. XIRR should be for multiple years, I think, but it seems to accurately portray my requirement for 1 year (please tell me if that isn't working as it appears to be).
However, some of our clients need this assessment of their investment every 6 months. Is there a way to consider the 'total return' with time-weighted application of contributions and withdrawals, for any period, not just annually?
If someone added money to their investment, my opinion is that a time-weighting is now necessary in order to more fairly and accurately consider that additional money into the investment. Equally, the same applies to withdrawals. To tackle this, I am using XIRR. XIRR should be for multiple years, I think, but it seems to accurately portray my requirement for 1 year (please tell me if that isn't working as it appears to be).
However, some of our clients need this assessment of their investment every 6 months. Is there a way to consider the 'total return' with time-weighted application of contributions and withdrawals, for any period, not just annually?
