return over the time interval, a nd then link together these holding period returns to obtain the LIROR. Returns methods in the absence of flows If there are no external flows, then all of these methods (time-weighted return, internal rate of return, modified Dietz Method, etc.) give identical results - it is only the various ways they handle flows that makes them different from each other. Logarithmic returns The continuous or logarithmic return method is not a competing method of compensating for flows. It is simply the natural logarithm of the growth factor. Fees To measure returns net of fees, allow the value of the portfolio to be reduced by the amount of the fees. To calculate returns gross of fees, compensate for them by treating them as an external flow, and exclude the negative effect of accrued fees from valuations. Annual rate of return Return and rate of return are sometimes treated as interchangeable terms, but the return calculated by a method such as the time-weighted method is the holding period return per dollar (or per some other unit of currency), not per year (or other unit of time), unless the holding period happens to be one year. Annualization, which means conversion to an annual rate of return, is a separate process. Refer to the article rate of return. See also Internal rate of return Modified Dietz method Rate of return Rate of return on a portfolio Simple Dietz method References Further reading Carl Bacon. Practical Portfolio Performance Measurement and Attribution. West Sussex: Wiley, 2003. Bruce J. Feibel. Investment Performance Measurement. New York: Wiley, 2003. Finance theories Investment Mathematical finance