What is the 'Time-Weighted Rate of Return (TWRR)'? Definition & meaning

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

More terms

Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.

Diversification

An investment strategy in which money is put into a variety assets.

Leverage

A method of trading using borrowed money that usually involves a very high level of risk.

Clean price

The quoted price of a gilt, which excludes accrued interest

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

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Time-Weighted Rate of Return (TWRR)