Calculate Quarterly Dollar-Weighted Average Return on Fund r
Calculating the quarterly dollar-weighted average return on a fund is crucial for understanding the performance of an investment over time. This calculator helps you determine the weighted average return based on the amount of money invested each quarter.
- Enter the fund’s quarterly returns as percentages (e.g., 5, 3, 7, 2).
- Enter the quarterly contributions (e.g., 1000, 1500, 2000, 2500).
- Click “Calculate” to see the results and a visual representation of the data.
The formula for calculating the dollar-weighted average return is:
DWAR = (∑(C_i * R_i)) / ∑C_i
where C_i is the contribution in the i-th period and R_i is the return in the i-th period.
| Fund | Average Return | Dollar-Weighted Average Return |
|---|---|---|
| Fund A | 5% | 4.8% |
| Fund B | 7% | 6.5% |
- Consider the timing of your investments. Contributing more when returns are high can significantly impact your overall return.
- Regularly review and update your investment strategy to maximize your returns.
What is the difference between average return and dollar-weighted average return?
Average return calculates the simple average of all returns, while dollar-weighted average return takes into account the amount invested in each period.
SEC Investment Statistics and BLS Investments and Benefits Survey provide valuable data for further analysis.