Time-Weighted Return is a simple metric that is often used for comparing returns across portfolios.
So, what does the TWR tell you?
It can be difficult to track and determine how much money was earned on a portfolio due to multiple transactions were made over time, Investors can't make an assumption of subtracting the beginning balance, from the ending balance because the ending balance reflects both the rate of return on the investments and any transactions during the time invested. In other words, transactions distort the value of the return on the portfolio.
Time-Weighted Return (TWR) measures the performance of the Invest fund from your initial deposit until the present time. Subsequent deposits or withdrawals have no impact on the performance of the fund