Disclosure: SmartFolio is ours. The advice works with any app, or with pen and paper.

In short

Don’t compare balances — deposits inflate them. Split time at every deposit or withdrawal, work out the return for each period, then chain them: (1 + r₁) × (1 + r₂) − 1. That’s the time-weighted return, and it’s what fund managers report.

Why the balance lies

You start with $10,000 and end the year with $16,000. Great year? Not if you deposited $5,000 in June. Most of the growth was your own money.

Time-weighted return, worked out

  1. Jan–Jun: $10,000 grows to $10,500 → +5%.
  2. You deposit $5,000 → $15,500.
  3. Jul–Dec: $15,500 grows to $16,000 → +3.23%.
  4. Chain them: 1.05 × 1.0323 − 1 = 8.4%.

That 8.4% is how your investments did, regardless of when you added money.

Time-weighted vs money-weighted

Money-weighted return (IRR, often called a “personal rate of return” on Canadian broker statements) counts your timing: money added before a rise helps it, money added before a fall hurts it. Time-weighted return strips timing out, so you can compare your picks with an index fairly.

Let SmartFolio do the maths

SmartFolio Analytics: one-year return with deposits removed, value against money invested
SmartFolio on iPhone
  1. Import every account. Deposits, withdrawals, trades and dividends from your broker’s file.
  2. Read time-weighted returns. From 1 week to all time, so deposits and withdrawals never distort your results.
  3. See each month. A monthly returns heatmap with each year’s result.
  4. Compare with the market. Against the S&P 500, with your all-time high, drawdown and volatility.

SmartFolio is free, with no account and no ads, and doesn’t give financial advice.

Common questions

How do I calculate my portfolio return with deposits?

Use time-weighted return: split time at each deposit or withdrawal, calculate each period’s return, and chain them.

What is the difference between time-weighted and money-weighted return?

Time-weighted ignores when you added money; money-weighted includes it.

Which return does my broker show?

Canadian broker statements usually show a personal (money-weighted) rate of return.

Does SmartFolio calculate time-weighted return?

Yes, for periods from 1 week to all time.

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