Author Topic: personal return vs fund return  (Read 957 times)

FirePaddle

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personal return vs fund return
« on: October 21, 2014, 11:53:25 AM »
Hello,

This was confusing me recently when I noticed that my personal return was way less than the fund return, and I started to become suspicious of the investment firm. I now understand that if I would look this up during a more positive quarter, the opposite would likely be true.

Vanguard explains it well.  I hope you find it useful too.

http://vanguardblog.com/2011/05/18/investor-returns-versus-fund-returns/

solon

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Re: personal return vs fund return
« Reply #1 on: October 21, 2014, 02:46:51 PM »
Excellent explanation. It's because the investor is investing a little bit each month throughout the period. I never thought of that.

FirePaddle

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Re: personal return vs fund return
« Reply #2 on: October 21, 2014, 02:54:35 PM »
My take home was that the personal return is highly influenced by the positive or negative returns earlier in the period, since that money is sitting there for so much longer.