Why does one page say 1% and another say 12%?
Why Two Numbers?
If you’ve ever flipped through your statement and thought,
“Hold on… one page says I earned 1%, another says the fund made 12%. Which one is right?”
you’re not alone.
The good news: both numbers are right. They just measure two different things. They’re not there to confuse you — they’re there to give you the full picture.
Two Returns. Two Stories.
Your Money-Weighted Return (MWR) is your personal journey with your money. It answers the question: “What did I earn?” because it takes into account when you invested and how much you put in or took out.
Your Time-Weighted Return (TWR) is the fund’s journey. It answers: “How did the investment do?” because it ignores deposits and withdrawals, showing the “pure” performance of the investment itself.
The $1,000 vs $1,000,000 Example
Here’s a simple case. The fund earns +1% every month:
Month | Deposit | Growth That Month | End Value |
|---|---|---|---|
Jan | $1,000 | +1% = $10 | $1,010 |
Feb–Nov | No More Deposits | Compounds monthly | ~$1,116 |
Dec | $1,000,000 | +1% = $10,011 | ~$1,012,127 |
By the end of the year, the MWR is about 1%, because almost all of your money ($1M) was only invested for one month. The TWR is about 12.7%, because the fund itself compounded +1% every month for the full year.
Scratching your head yet? Exactly — two very different numbers, both correct.
Same Fund, Different Results?
Here’s where it gets even more interesting.
Spouses often look at their statements — same fund, same year — and see different returns. Cue the raised eyebrows at the kitchen table.
Example 1: Deposits at Different Times
- Spouse A invests in January, right before the market dips.
- Spouse B invests in March, after the dip.
- By year-end, the fund (TWR) shows +8% for both.
- But their personal returns (MWR) are very different:
- Spouse A: “This was a terrible idea. I’m barely up.
- Spouse B: “Best decision we ever made. Clearly, I’m the smart one.”
Example 2: Withdrawals at Different Times and Amounts
- The couple needs $25,000 for a new roof.
- Spouse A withdraws $10,000 early in the year, before the market dips.
- Spouse B withdraws $15,000 later, right after the dip but before the recovery.
- Now the bragging rights flip:
- Spouse A: “Ha! My return looks great — I dodged the downturn with my withdrawal.”
- Spouse B: “Ugh. Mine looks awful — I pulled money right after prices dropped.”
And just like that, the dinner table turns into an investing competition. One spouse is claiming victory while the other is plotting their comeback.
Not Confusion. Transparency.
So the next time you see two different return numbers on your statement, don’t assume someone’s made a mistake.
MWR is your personal experience with your money. TWR is the investment’s performance on its own.
Both are true. Both are useful. And together, they explain why your experience can look very different from the fund’s published return.
It’s not confusion — it’s transparency, with maybe a dash of math-induced headache and a sprinkle of dinner-table sarcasm.
Disclaimer: The Case study mentioned in this presentation is provided for illustrative purposes only and does not represent an actual client or an actual client's experience, but rather is meant to provide an example of our process and methodology. The results portrayed is representative of all of our clients' experiences.
