TWR (time-weighted)

TWR chains returns between deposits and withdrawals — why it is used versus a benchmark.

TWR (time-weighted return) measures strategy performance so that your deposit and withdrawal timing does not distort the result. Sub-period returns are chained.

That is why TWR is often compared to an index or ETF: you ask how the strategy did, not how well you timed cash transfers.

XIRR / MWR include deposit timing — better for “what return did I get on the money I actually sent”.