Could anyone explain which trwor or mwror to use when firm have control over cash flows and why??
Also which is more difficult to do mwror or twror??
As under mwror valuation done at every cash flow and under twror it’s difficult to do pv of all CF…
And modified Dietz is twror or mwror?
Thankyou 🙏
Look if we want to track the performance of our portfolio manager or whoever investing on behalf of us then we will use – TWROR (because in this only time matters not cashflows which we withdraw and deposit )
hope this helps !
But I guess TWROR ignore timing of our cash flow
Yes, it ignores the timing of the cash flow, that’s why it will help us in determining the manager’s performance in managing our fund.
However, if we want to evaluate how fair the Manager was in returns when the timing of the cash flows are considered then we need to use money-weighted returns.