Portfolio Performance vs Brokerage

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#1

This is something I’ve been trying to figure out for a while now, and it’s really bugging me. My brokerage is Schwab, and they let me see what my performance has been over varying timeframes. I use Portfolio Performance because I transferred brokerages towards the end of last year, so Schwab doesn’t have my full performance history. The problem is that when I compare the twr and irr that the two platforms give me for the same time period they end up being different. I even made a new portfolio on PP that mimicked exactly what the Schwab portfolio has in its system (which is just the history from the time of transfer), and the returns were still different.

Does this mean PP’s calculation is wrong or are the two systems just making different calculations? How am I even supposed to know? It’s not like I can check the math that the progams are doing.

I really want to use PP, but if I have to choose I’d trust the numbers my brokerage is giving me. Any advice or insight would be great.

#2

Hey,

the numbers on the performance dashboard you are comparing refer in PP just to the securities or also including cash balance on your account? In the standard set-up PP takes numbers from total portfolio.

#3

They are referencing total portfolio in both PP and Schwab

#4

the most likely reason are different stock price data sources. How big are the differences anyway? If they are minor this would point to different price data. If they are big however (like a couple of percent per year) then it is more likely that your broker does calculate a different performance metric. In that case you need to find out which metric suits your needs better.

You can be assured, that PP is calculating correct (i.e. no math error). And to be honest, I would rather trust PP than what my broker is telling me.

1 Like
#5

Another possible reason for differences: IRR figures in PP are always annualized, TTWROR figures never are. Schwab might do it the other way round or in a still different way …

#6

Can we be certain that Schwab is including costs/fees into the calculation? I noticed some trickery with brokers to show a more comforting performance.
For example one broker of mine does not include sold positions into the calculation. That way loses, once realized, will not have an effect on my “performance”…

Portfolio Performance on the other side is always calculating return based on all activities.