DEFINITION of 'MoneyWeighted Rate Of Return'
A measure of the rate of return for an asset or portfolio of assets. It is calculated by finding the rate of return that will set the present values of all cash flows and terminal values equal to the value of the initial investment. The moneyweighted rate of return is equivalent to the internal rate of return (IRR).
INVESTOPEDIA EXPLAINS 'MoneyWeighted Rate Of Return'
There are many ways to measure returns for assets, and it is important to know which method is being used when reviewing asset performance. Moneyweighted rate of return incorporates the size and timing of cash flows, so it is an effective measure for returns on a portfolio. Another popular return calculation is the TimeWeighted Returns method.
RELATED TERMS

Net Present Value  NPV
The difference between the present value of cash inflows and ... 
Actual Return
The actual gain or loss of an investor. This can be expressed ... 
Internal Rate Of Return  IRR
The discount rate often used in capital budgeting that makes ... 
Return
The gain or loss of a security in a particular period. The return ... 
Rate Of Return
The gain or loss on an investment over a specified period, expressed ... 
Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ...
Related Articles

Fundamental Analysis
Internal Rate Of Return: An Inside Look

Options & Futures
Surviving On An Irregular Income

Budgeting
Which is a better measure for capital ...

Fundamental Analysis
Which leverage ratios are most useful ...