what is time weighted rate of return twr 
the time weighted rate of return twr is a measure of the compound rate of growth in a portfolio the twr measure is often used to compare the returns of investment managers because it eliminates the distorting effects on growth rates created by inflows and outflows of money the time weighted return breaks up the return on an investment portfolio into separate intervals based on whether money was added or withdrawn from the fund the time weighted return measure is also called the geometric mean return which is a complicated way of stating that the returns for each sub period are multiplied by each other formula for twruse this formula to determine the compounded rate of growth of your portfolio holdings t w r 1 h p 1 1 h p 2 1 h p n 1 where t w r time weighted return n number of sub periods h p end value initial value cash flow initial value cash flow h p n return for sub period n begin aligned twr left 1 hp 1 times 1 hp 2 times dots times 1 hp n right 1 textbf where twr text time weighted return n text number of sub periods hp dfrac text end value text initial value text cash flow text initial value text cash flow hp n text return for sub period n end aligned twr 1 hp1 1 hp2 1 hpn 1where twr time weighted returnn number of sub periodshp initial value cash flow end value initial value cash flow hpn return for sub period n investopedia crea taylor