personal return vs fund return

[FirePaddle]

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]

Excellent explanation. It's because the investor is investing a little bit each month throughout the period. I never thought of that.

[FirePaddle]

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.