A return that knows when your money arrived
Annualized return is now money weighted. If you invest a bit every month, the old figure was reading you low.
The old annualized return took your total gain and spread it over the years since your first purchase. That quietly credits every pound with the full holding period, including the one you added last month.
For anyone who invests steadily, that is wrong in the same direction every time. One position built with ten years of monthly buys, genuinely earning 10% a year, was being reported at 5.3%.
What replaced it
Every figure now comes from XIRR, which solves for the rate that actually fits your dated cash flows. Money you added last month is credited with one month, not ten years.
Your number may go up or down. Individual holdings usually read higher, and the whole portfolio usually reads lower. Both are on the same screen, and both are now right.
Two rules that keep it honest
- Nothing under a year is annualized. Turning five weeks of movement into a yearly rate invents a number, so short holdings show plain total return instead.
- Portfolio return pools every cash flow into one series and solves it once, rather than averaging the holdings. Averaging over-weights whatever grew most and reintroduces the same error a level up.
