Yield Calculations

 

Fund Manager can calculate two different types of returns (yields) over any specified time period.  These include:

Fund Manager can calculate ROI or TWR for investments, symbols, asset types, investment goals, sectors, investment types, or entire portfolios.

 

ROI Versus TWR Comparison:

To see how well your money has performed, use the ROI yields.  To see how well your investment choices have performed, and ignore the timing of external cash flows, use the TWR yields.  The TWR yields can be used to compare against other published performance figures, like the returns published by various mutual fund companies.  The ROI yields will be the same as the TWR yields if you have no cash flows within a yield term.  If you timed your investing well by putting more money in during up periods, and less during down periods, your ROI will be higher than the TWR.  Conversely, if you timed your cash flows badly, your ROI will be lower than your TWR.

 

Related Details:

Yields can be viewed in reports, graphs, or in the Portfolio Editor.

 

By default, yields for terms less than one year are not annualized, and yields for terms greater than one year are average annualized.  Whether or not to average annualize yields can be controlled from the Preferences - Yield dialog.

 

For the yields displayed above the graphs, the yields are displayed for the yield term ending on the ending (right most) graph date. For example, if the graph is displaying data from 12/24/2006 to 6/3/2009, a reported 1 year yield is the yield from 6/4/2008 to 6/3/2009.

 

In order to calculate yields on investments, Fund Manager requires pricing information for both the starting and ending dates of the yield term.  If prices are recorded for both the starting and ending dates, Fund Manager will use those prices and calculate the yield.  When a price is not recorded, Fund Manager can "interpolate" one. You can control when and how Fund Manager interpolates prices for yield calculations with the interpolation range settings.  See Interpolation Range for a description of the interpolation range options and how they work.  When a price is recorded or when Fund Manager interpolates a price, a yield will be calculated and displayed.  When there is no recorded price and the interpolation range settings are set such that Fund Manager does not interpolate a price, "N.A." will be displayed for that yield.

 

The set of yield terms displayed above the graphs and on the yield reports can be specified with the Options / General Preferences... / Yields dialog. In addition to these yield terms, a yield for the term from the beginning (left most) date of the graph to the ending (right most) date of the graph is also displayed above the graphs, and is labeled as "gph" to stand for "graph". The date range may be changed using the menu command View / Dates.

See Also

Return On Investment

Time-Weighted Return

About Graphs

About Reports

Interpolation Range

 


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