MWRR is the most common method used to calculate the performance of an investment fund. As opposed to TWRR, the client’s interest is in evaluating the effective return of a fund and therefore taking into account not only how good a fund manager is, but also how many transactions he/she makes in the period under observation.
If "F" represents the net cash transactions recorded during the related time period (t0, T); V (t0) the initial value of the fund; V (T) the value of the fund at the end of the period of observation; the average capital the client has invested, then MWRR is equal to:
Editor: Mirko IORI
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