First of all, thank you for this incredible tool! The detailed performance metrics and analytics are extremely useful for tracking investments.
However, I noticed that the software focuses mainly on Time-Weighted Return (TWR) and Internal Rate of Return (IRR). While these are great for performance measurement, they do not provide an intuitive way to assess the absolute return of a portfolio, considering deposits and withdrawals.
Suggestion: Add an âAbsolute Returnâ metric
This metric would allow users to see the actual gain or loss in percentage terms, relative to the starting capital, including all cash flows.
Formula Example:
Absolute Return=(Final ValueâInitial Value+WithdrawalsâDepositsâ)/Initial Value
Why is this important?
The TWR neutralizes the effect of cash flows, making it hard to assess the real impact of portfolio losses or gains.
The IRR is useful but is annualized, which does not always provide an intuitive understanding of the real portfolio performance over a custom period.
An âAbsolute Returnâ metric would allow users to quickly see how much their portfolio has truly gained or lost over a selected timeframe, without needing to calculate it manually.
Would it be possible to include this as a built-in performance metric in a future update?
I believe it would be a valuable addition for many users!
Thank you for your time and consideration.
Looking forward to your feedback!
There has been a looong discussion in German about this. Unfortunately, while many people claim to have some intuition about how this should work, noone has been able to propose a well-defined calculation method that actually makes sense.
Every portfolio starts at an initial value of 0, so if you look at it with your formula for the whole duration, you will never get any result (division by zero). But even if you start from some later point in time, it most often wonât make any sense; e.g. with a savings plan, a portfolio may have been at a value of just $100 at some starting point but now be at $100000 or whatever, and any valuation changes will be hugely amplified.
(The numerator in this formula is called âdeltaâ in PP, by the way. So you can easily calculate some examples with your formula and see what numbers you get.)
In the German thread, most suggestions wanted to have a denominator that is the initial value plus deposits minus withdrawals, or the initial value plus deposits only (withdrawals not subtracted), or sometimes some kind of average. But the results of these are equally useless for most scenarios.
My recommendation for that would be: Just look at the total value, not as a percentage relative to something. You can then see that you have an absolute return of, say, $5000. As I said, this is calculated by PP as âdeltaâ.
Thank you for your response! I understand that there have been discussions in the German forum about this topic, and that different users might have different expectations regarding the calculation method.
However, my request is not about debating various methods, but rather about adding a simple, intuitive metric that is commonly found in financial reporting: the absolute return relative to the initial value, adjusted for cash flows.
Clarifying my request:
I am not suggesting a replacement for TWR or IRR but an additional metric that gives a clearer picture of the actual performance for users who want to track their portfolio in absolute terms.
The argument about division by zero is only an issue if the portfolio starts at 0, but most users set a meaningful start date with a positive balance.
The issue with savings plans amplifying returns can also be said for TWR, which is why users should be free to choose the metric that best fits their needs.
Why is this relevant?
Portfolio Performance already provides the raw data (delta), so integrating this as a metric would be a minor change.
Many users (myself included) find it useful to compare their returns relative to their starting value, considering withdrawals and deposits.
This metric is widely used in investment reporting, even if not everyone agrees on a single âperfectâ formula.
What I am asking for:
I am not asking to remove existing metrics, but simply for an additional option. Could the development team consider implementing this as an optional performance metric? Users who find it useful would benefit, and those who donât need it could simply ignore it.
I appreciate your time and the work done on Portfolio Performance, and I hope this request can be considered constructively.
Iâve explained why your metric doesnât make sense (as donât the other proposed versions). Iâm not going to comment further on that. I similarly stopped commenting on the German thread long ago.
I understand that you donât see value in this metric, but my request is simply for the Portfolio Performance team to consider implementing it as an additional option for users who do find it useful.
Many other financial tracking tools provide an absolute return metric relative to the initial investment, adjusted for cash flows. This is a standard way of measuring real portfolio performance in many financial reports.
The fact that different formulas exist does not mean the metric is uselessâjust that users should have the flexibility to choose the one that fits their needs, just like they do with TWR vs. IRR.
Would the development team at least consider adding it as an optional performance metric? Those who donât need it can simply ignore it, while those who do will benefit from it.
I understand that implementing any new metric requires careful consideration. However, the fact that different formulas exist does not mean that a solution cannot be implemented. Portfolio Performance already provides multiple ways to calculate performance (TWR, IRR, delta, etc.), so why not offer users an additional option?
Regarding the claim that this is not a standard metric:
Absolute return, adjusted for deposits and withdrawals, is a common performance indicator in financial tools and reports. Examples include:
Morningstar uses absolute return metrics alongside TWR and IRR.
Bloomberg reports total return including cash flows.
Many brokerage account statements provide a similar calculation to show net gains/losses relative to starting capital.
This is not about replacing existing metrics but about giving users the choice. Those who donât need it can ignore it.
Wouldnât it be more productive to let the development team decide whether this feature request aligns with their roadmap rather than dismissing it outright?
Itâs unfortunate that every request for discussion here is met with defensiveness rather than constructive engagement.
If this topic has been debated for months without a solution, perhaps itâs not because the definition is unclear, but because certain members prefer to shut down the conversation rather than explore potential implementations.
If the development team has no interest in this feature, they can simply say so. But dismissing user requests with arrogance instead of arguments is counterproductive for an open-source project.
Suggestion: Add an âAbsolute Returnâ metric
Formula Example:
Why is this important?