Comments on: Morningstar Adds Dollar-Weighted Returns Data http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/ Helping a unique generation achieve financial independence. Sat, 21 Nov 2009 08:12:37 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Generation X Finance » Investment Returns Are Not Always What They Seem http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-134 Generation X Finance » Investment Returns Are Not Always What They Seem Tue, 28 Nov 2006 01:26:02 +0000 http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-134 [...] This isn’t to say that basing part of your investment decisions on returns is not important, but it is important to understand that those returns are only as real as your own investment activity. A while back I talked about Morningstar adding a new metric to their fund information, or dollar-weighted returns (Investor Returns). This new method tracks the inflow and outflow of money into a fund to create a more realistic return most investors have actually seen with the fund. [...] [...] This isn’t to say that basing part of your investment decisions on returns is not important, but it is important to understand that those returns are only as real as your own investment activity. A while back I talked about Morningstar adding a new metric to their fund information, or dollar-weighted returns (Investor Returns). This new method tracks the inflow and outflow of money into a fund to create a more realistic return most investors have actually seen with the fund. [...]

]]> By: Jeremy http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-21 Jeremy Sun, 05 Nov 2006 00:42:37 +0000 http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-21 Good question, and I think I have the answer. I was able to find a factsheet PDF on exactly what the new Morningstar investor return is, how it works, and how it can help an investor. In summary though, it is a measure of how all of the investors in the fund did on average. This is different from a straight total return because investors typically make many transactions over the course of time, with systematic buys or sells, etc. <a href="http://corporate.morningstar.com/us/documents/PR/Investorreturnsfactsheet.pdf" title="Morningstar Investor Return Factsheet" rel="nofollow">Morningstar Investor Return factsheet</a> Good question, and I think I have the answer. I was able to find a factsheet PDF on exactly what the new Morningstar investor return is, how it works, and how it can help an investor.

In summary though, it is a measure of how all of the investors in the fund did on average. This is different from a straight total return because investors typically make many transactions over the course of time, with systematic buys or sells, etc.

Morningstar Investor Return factsheet

]]> By: Dogberry http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-20 Dogberry Sat, 04 Nov 2006 23:39:44 +0000 http://genxfinance.com/2006/11/04/morningstar-adds-dollar-weighted-returns-data/#comment-20 So, what will this, dollar-weighted, number tell me? Tat most investors did not earn the 'average'? It sounds like an interesting concept. I just can't figure out how it can be useful. Dogberry <a href="http://money-and-investing.dogberrypatch.com/" rel="nofollow">Money & Investing Dogberry Patch</a> So, what will this, dollar-weighted, number tell me? Tat most investors did not earn the ‘average’?

It sounds like an interesting concept. I just can’t figure out how it can be useful.

Dogberry
Money & Investing Dogberry Patch

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