Pinky, to be clear, i am go into FSM with bond fund first. I hv "a lot" equity fund in PM that balance up my portfolio.

Cakaplah awal

my mistake to make u confuse.
I have striker now, but looking for for midfield and defender. thinking of sold some striker to allocate fund for defender.

Hwang select bond? Ambond?

Ya, Hwang Select bond is one of shortlisted. I shortlisted OSK-UOB Emerging Markets Bond Fund as well. No plan for Ambond as it is Malaysia bond, i hv one in PM already.

wong seefu or someone can help enlighten me on what is DCA+VCA?

Dollar Cost Average
E.g. every month top up RM100 regardless of fund performance

Value Cost Average
E.g. every month INCREASE VALUE of RM100, Dec-12 fund value RM5,900, Jan-13 fund value RM5,850 (i.e. dropped RM50), u top up RM150

Thanks!

Might want to try this 'VCA'. Only tried DCA before.

If want to use it, is it depends on situation or what?

I personally think that VCA is superior to DCA. For the exact theory and pros and cons, perhaps u as a full-time UT consultant should read up more on it?

Templeton's new fund to 'maximise returns'

KUALA LUMPUR: Franklin Templeton Asset Management (Malaysia) Sdn Bhd recently launched the Templeton Asian Bond Fund (TABF), offering qualified local investors the opportunity to tap an award-winning and actively managed fixed-income portfolio.

Read more: Templeton's new fund to 'maximise returns' http://www.btimes.com.my/Current_News/BTIM.../#ixzz2Jyz4wnZb

just some food for thought.

A lot of us uses XIRR/CAGR to evaluate the investments performance.
I have wondering for quite some time,
why no one mentioned TWRR (Time-weighted rate of return)?

Especially for fund investments, where we are constantly topping up and receiving dividends. Shouldn't TWRR a more appropriate tool to evaluate the fund performance?

XIRR is the MS Excel formula for TWRR

hmm..

from my own understanding, XIRR in excel is different with TWRR.
XIRR calculate IRR, or more accurately, MWRR (money-weighted rate of return).

Extracted from lecture notes,

"TWRR focused more on "growth factors",
Reflecting the changes in the value of the fund between the times of consecutive cash flows.
Combining these growth factors comes up with an overall RR for the period."

Of course, I do realise that TWRR lack the concept of "time value of money".

I am not promoting which method is superior.
Just asking out of curiousity + on the way to find a better evaluation tool.

XIRR takes into account 2 variables - money and time

the formula takes into account the timing of the cash flows

perhaps u should open your Excel and try to play around with the XIRR formula to get a clearer picture

Yes I know that. Which is why I said XIRR is more like MWRR.
I did linear interpolation for a set of arbitary cash flow manually and I got almost the same answer as XIRR in excel, with few decimals differences. That why I am pretty sure XIRR mimics MWRR.

I am currently using XIRR to evaluate my investments performance.

And I still stick to my belief that TWRR is different with XIRR.
Unless my lecturer gave me false knowledge.

I also studied TWRR before, and my brain tells me that XIRR = TWRR

Correct me if I'm wrong

Perhap this will help you understand better.

Internal Rate of Return and Time Weighted Return. If your portfolio has cash flows, i.e. you deposit or withdraw money, then you need to use either internal rate of return, IRR, or time weighted return, TWR, also called TWRR time weighted rate of return and TWIRR time weighted internal rate of return. The difference between the two is that TWR ignores the timing of the cash flows while IRR accounts for the timing of the cash flows. Rather than explaining each in depth, I’ve created a example for each in this spreadsheet. In summary, to calculate IRR use the XIRR function in Excel, while TWR calculates returns from one cash flow to the next and sums those ignoring the cash flows.

Which of the two should you use? That question never seems to get old. If you’re a fund manager or reading the returns of a fund manager then you’re most likely using TWR. That’s because fund managers don’t have control over the cash flows, so they shouldn’t receive any benefit or penalty for the cash flows.

Individual investors should use the method they deem most appropriate. The important question is, do you have control of the cash flows. If the answer is no then use TWR, if yes then IRR is the best choice. If you are attempting to calculate your past performance then there is another important question. Do you know the account balances at the date of the cash flows? If not then you have to use IRR as TWR requires balances at the time of cash flows.

This post has been edited by aronteh: Feb 5 2013, 02:02 PM


Attached File(s)
 XIRR_TWRR_sample.xls.zip ( 8.15k ) Number of downloads: 62

Chill bro I'm not trying to prove that I am correct.
Just wanna get some opinions from sifus around.

Thank you for the feedback.
Impressive modelling skill you have there.
The sentences in bold is really enlightening.

Edited,

Further question is out of topic.
I'll leave it here for now.

This post has been edited by yeapwei: Feb 5 2013, 03:38 PM

Interesting.. though I am quite blur.