About a year ago, I opened an index-fund investment account, with a robo advisor. After one year, it shows my simple earnings at 10.3% and time-weighted return at 18.3%. From this, it seems likely, that simple earnings is the amount of interest earned on the total amount invested over the year, while the time-weighted return shows the increase on my initial deposit.
Is the time-weighted return the same as the average annual return? So if year one has an annual return of 10% and year two is 5%, then the annual average for those two years is 7.5%. In this specific scenario, would my time-weighted return also be 7.5%, or would it be 15%, since the initial investment went up 10%, then up 5%?
Thank you for any clarification :)
EDIT: Fixed my bad math to show 15%, not 5%.
Submitted September 26, 2017 at 09:51AM by Maziou http://ift.tt/2y5zUFw
