TWR answers "how did my investments do?", MWR answers "what did my money earn?". They match when you never add or withdraw money, and drift apart when deposits land just before a rise or a fall. A worked example shows the same +4.5% TWR next to an MWR of −0.3% or +9.8%.
- •TWR removes the effect of deposit timing, which is why it's the figure that can be compared with an index or a fund.
- •MWR (IRR) includes your timing: deposits before a rise lift it, deposits before a fall pull it down.
- •A gap between the two isn't an error; it's the effect of your deposit timing.
- •Always check which one a tracker or broker shows before comparing numbers.
TWR vs MWR: Time-Weighted vs Money-Weighted Return, Explained With an Example
What time-weighted (TWR) and money-weighted (MWR) returns measure, why they can differ by several percentage points on the same portfolio, and a worked example with deposits mid-year that shows exactly how.
Short answer
A time-weighted return (TWR) measures how your investments performed, with the effect of when you added or withdrew money removed — so it can be compared with an index. A money-weighted return (MWR, the internal rate of return) measures what your money actually earned, including the timing and size of your deposits. On the same portfolio they can differ a lot: in the example below both investors have a TWR of +4.5%, but one has an MWR of −0.3% and the other +9.8%, purely because of when the second deposit went in.
Two people can hold exactly the same investments over the same year and end up with very different-looking returns. Usually nobody made a mistake: one figure is a time-weighted return (TWR) and the other a money-weighted return (MWR). They answer different questions, and once you've seen them side by side with real numbers, it's easy to tell which one you're looking at.
What each one measures
Time-weighted return (TWR) measures how the investments themselves performed. It splits the period at every deposit and withdrawal, measures the return of each piece, and chains those pieces together. Because each piece only looks at price movement, the size and timing of your deposits drop out. That's what makes TWR comparable with an index or a fund: the index doesn't know when you added money either.
Money-weighted return (MWR) measures what your money actually earned. It is the internal rate of return (IRR) of your own cash flows — every deposit, every withdrawal and the value at the end — usually expressed as a yearly percentage. Money that was invested for longer, or in larger amounts, weighs more. When dates are irregular, the calculation is often called XIRR.
If you never add or withdraw money, the two give the same result over the period. They only drift apart when money moves in or out.
A worked example: same TWR, very different MWR
Two investors hold the same portfolio for a calendar year. Each starts with €10,000 on 1 January and deposits another €10,000 on 1 July. The only difference is the order of the market moves.
Investor A — the deposit lands just before a fall. The portfolio rises 10% in the first half (€10,000 → €11,000). The €10,000 deposit takes it to €21,000, and then it falls 5% in the second half, ending at €19,950.
Investor B — the deposit lands just before a rise. The portfolio falls 5% in the first half (€10,000 → €9,500). The deposit takes it to €19,500, and then it rises 10%, ending at €21,450.
| Investor A | Investor B | |
|---|---|---|
| Deposited in total | €20,000 | €20,000 |
| Value on 31 December | €19,950 | €21,450 |
| Result in euros | −€50 | +€1,450 |
| Time-weighted return | +4.5% | +4.5% |
| Money-weighted return (per year) | −0.3% | +9.8% |
The TWR is the same for both, because it only chains the two half-year returns: (1 + 10%) × (1 − 5%) − 1 = +4.5%, and the same in the other order. The investments did exactly as well for both investors.
The MWR is very different, because it asks what each euro earned. Investor A put half the money in just before the fall, so most of the capital only experienced the −5% — the year ended slightly below what went in. Investor B put half in just before the rise, so most of the capital caught the +10%. (The MWR figures are the annualised internal rate of return of each investor's cash flows: −€10,000 on 1 January, −€10,000 on 1 July and the end value on 31 December.)
Neither number is "the real one". The TWR tells both investors their portfolio did +4.5% — useful when comparing with an index over the same year. The MWR tells each of them how the deposit timing worked out for their own money.
How they're calculated
TWR — split the period at each cash flow, take the return of each sub-period, and chain them:
TWR = (1 + r₁) × (1 + r₂) × … × (1 + rₙ) − 1
where each r is the return between two cash flows, measured on the value just after the previous one. Many tools approximate this (for example with the Modified Dietz method) when they don't have a value on every deposit date; a daily calculation needs no approximation.
MWR — find the single yearly rate r that makes the present value of all your cash flows zero:
0 = Σ CFₜ / (1 + r)^tₜ
with deposits counted as negative, withdrawals and the final value as positive, and t in years from the first cash flow. There is no closed formula; software finds r numerically.
Which one to look at
- Comparing with an index, a fund or someone else's results: TWR, because it isn't distorted by when money went in.
- Seeing how your own money did, timing included: MWR, because it reflects when and how much you added.
- A big gap between the two: a sign that deposit or withdrawal timing mattered over the period — not that one figure is wrong.
Before comparing two numbers from different apps or reports, check which of the two each one is.
How StockDashes shows it
Checked in the StockDashes code on 5 October 2026:
- The free return calculator (no account) shows your time-weighted return in euros next to the S&P 500 (SPY) total return over the same period. It is calculated day by day from your holdings, with each day's purchases and sales taken out — so deposits don't move the line — and cash left out.
- When you're signed in, the performance page shows the same time-weighted return and, next to it, "Your return (MWR)": the money-weighted return as a yearly percentage (XIRR over your deposits and today's value, including cash).
- Coverage: the return only includes holdings StockDashes can price. US-listed holdings are priced, and some European shares are priced via their US listing (the same shares, or an ADR at its published ratio). UCITS ETFs such as VWCE or IWDA are shown by name but not priced yet — prices coming — so they're left out, and the result says how much of your invested capital it covers.
Want to see both numbers for your own portfolio? Export your DEGIRO Account Statement (here's how) and drop it into the calculator — it's read in your browser and never uploaded.
Open the free return calculator →
Frequently asked questions
What is the difference between TWR and MWR? TWR measures how your investments performed with the timing of your deposits and withdrawals removed. MWR measures what your money earned, including that timing. They are equal when no money moves in or out, and differ when it does.
Why is my money-weighted return lower than my time-weighted return? Usually because more money was invested just before a weaker stretch, or less just before a strong one. The MWR weighs each euro by how long and when it was invested; the TWR doesn't.
Is money-weighted return the same as IRR? Yes. The money-weighted return is the internal rate of return (IRR) of your cash flows, usually expressed per year. XIRR is the same calculation for cash flows on irregular dates.
Which return should I compare with an index? The time-weighted return, because an index has no deposits or withdrawals of its own. Comparing your money-weighted return with an index mixes your timing into the comparison.
Does StockDashes show TWR or MWR? Both. The free calculator shows the time-weighted return against the S&P 500 total return; when you're signed in, the performance page also shows your money-weighted return (XIRR) as a yearly percentage.
The short version
TWR: how the investments did, timing removed — the number that can be compared with an index. MWR: how your money did, timing included — the number that tells you what your deposits actually earned. Same portfolio, same +4.5% TWR, and an MWR of −0.3% or +9.8% depending only on when the second €10,000 went in.