An Introduction to Dollar-weighted Returns

By Neil Jensen

The Canadian Securities Administrators (CSA) has recently mandated that performance reporting on client statements use dollar-weighted returns, to be implemented by 2016. Most firms, including Steadyhand, currently report client account performance using time-weighted rate of returns.

In a new article, I summarize the two methods and provide an example of when the resulting performance numbers can be quite different. I've tried to minimize the use of math, but it really is essential in understanding how the methodologies work, so make sure to grab a cup of coffee before reading.