Performance reporting in the PMS industry had no standardized reporting till SEBI mandated managers to only report TWRR. (Time Weighted Rate of Return).
TWRR measures skill of a fund manager – TWRR does not care about quantum of money invested, only the return earned over the time period money was invested. It is calculated by multiplying returns over each time period money is invested and dividing it by the total time period. Alternatively, one can calculate this by assuming units are being issued at prevailing prices and calculating how the NAV of each units has evolved (MF method).Read More