The TWR calculation method is a standard industry method considered accurate for the calculation of your investments.
Example:
You invest £1,000 initially. The fund grows 10% → value is £1,100.
You add £500 more → total £1,600.
The fund then grows 23.75% → value rises to £1,980.
Divide into two periods:
Period 1 return = (1,100 / 1,000) - 1 = 10%
Period 2 return = (1,980 / 1,600) - 1 = 23.75%
TWR = (1 + 0.10) × (1 + 0.2375) - 1 = 36.13% overall growth, ignoring the timing and amount of your deposits.
However, it's possible that you see some odd numbers/percentages in your app that can be explained as follows:
TWR can be negative even if you made money overall, because TWR looks at the percentage returns, not just your final profit. If you suffer a large loss with a small investment early on, TWR reflects that big percentage drop, even if you later add more money and end up with a profit.
Example:
Invest £100 → drops 99% to £1
Add £10,000 → grows 13% to £11,301
You made £1,200 overall, but TWR = –98.9% (that early drop counts a lot in the calculation).
TWR can be positive even if you lost money overall, because it captures strong performance on smaller amounts before you invested more. If you make good percentage gains early (with a smaller amount), the TWR is high, even if you later invest more and those new funds lose value.
Example:
Invest £100 → grows 50% to £150
Add £10,000 → drops 10% to £9,135
Your overall loss is –£965, but TWR = +35% (thanks to the early gain).
Remember the colours in the app:
Green Line = Investment performance
Purple Line = Your net invested money