What is Time-weighted Return?

Time-weighted Return is the most commonly-used return calculation in the financial industry, and is an easy metric to compare returns between different portfolios. 

By tracking the portfolio’s performance from your first deposit, a portfolio’s TWR removes the distortions that various cash inflows and outflows create. In essence, TWR measures the portfolio manager’s ability to generate returns, not the effects of an individual’s deposit and withdrawal behaviours.