Time-Weighted Return Calculator

Split the timeline at every deposit or withdrawal, compute the return of each sub-period with capital movements excluded, then chain them geometrically: TWR = (1 + r₁)(1 + r₂)…(1 + rₙ) − 1. This calculator does it for you from your starting balance and each period's cash flow and ending balance.

TWR = Π(1 + rᵢ) − 1, where each sub-period return rᵢ = EndValue / (StartValue + CashFlow) − 1 when the flow is invested for the period. The geometric chaining is what removes the distortion from deposits and withdrawals.

Account growth (ending balance over starting balance) counts the money you deposited as if it were profit. TWR removes it. A 140% account that doubled mostly because you added capital can have a true TWR of only 20%. The bigger your deposits relative to gains, the wider the gap.

TWR ignores the size and timing of cash flows and measures the strategy itself, which is why it is the GIPS standard for comparing managers. MWR (money-weighted return, an IRR, approximated here by Modified Dietz) does reflect when and how much you invested, so it answers "what did I, the investor, actually earn." Use TWR to judge skill, MWR to judge the dollar outcome.

Yes, by removing their effect. TWR breaks the period at each flow and excludes the contributed capital from the return calculation, so a deposit never shows up as performance and a withdrawal never shows up as a loss.

There is no universal threshold; it must be judged against a benchmark and the risk taken (Sharpe, drawdown) over a statistically meaningful period. A high TWR over a few weeks proves little. What matters to allocators is a TWR that is verified, long enough to be significant, and competitive versus a relevant benchmark.