Performance

Overview

Performance metrics include, but are not limited to, the following.

1. Gains
2. Income
3. Unrealized gains
4. Profit potential
5. Rate of return (vXIRR)
6. Multiple-on-money (MoM)
7. Capital Investment
8. Cashflow

Each of these performance metrics are calculated for each levels of the AssetView portfolio hierarchy as follows.

1. Portfolio
2. Party or Parties
3. Account or Accounts
4. Asset or Assets
5. Lot or Lots

Please see Portfolio Hierarchy for detail of the AssetView Portfolio Hierarchy.

Each of these metrics, for each level of the hierarchy, are also calculated across mode.

1. Closed positions through today (History Mode)
2. Open positions through today (Active Mode)
3. All positions through today (Lifetime Mode)
4. Open positions and projected positions through a projected date (Active Projected Mode)
5. All Positions through a projected date (Lifetime Projected Mode)

Please see Modes for detail on Modes.

Profit Potential

AssetView Profit Potential to measure performance and compare returns across disparate accounts, assets, and asset classes. The figure is a summation of realized gains, unrealized gains, and income. The unrealized gain is based on asset liquidation at either a market value (if known) or a liquidation value that AssetView employs from a recent transaction.

Example:

Realized Gain $1,000 + Income $200 = Profit $1,200

Profit $1,200 + Unrealized Gain $400 = Profit Potential $1,600. 

Return % (XIRR)

AssetView's Return % uses XIRR, a time-based, cashflow-based calculation of extended internal rate of return, to measure performance and compare returns across disparate accounts, assets, and asset classes. XIRR stands for extended internal rate of return. AssetView refers to the XIRR calculation as a vXIRR (virtual XIRR) in cases where a reasoned assumption is made for the liquidation value of an asset with open positions (e.g. the liquidation share price is set at the share price of the most recently booked transaction on the asset).

XIRR Formula

XIRR = IRR such that: Σ (CF_t / (1 + r)^((t - T0) / 365)) = 0

Where:

The equation solves for r (rate of return) where the net present value (NPV) of all cash flows equals zero.

Example:

The following series of cashflows would result in an XIRR of 3.69%.

Date        Transaction
------      -----------
6/1/23         -$97,250 
6/1/23          -$1,458    
7/1/23           $1,750    
1/1/24           $1,750    
11/17/24        $97,250   
3/28/24          $3,121    

MoM

AssetView uses MoM, multiple on money, to measure investment performance and compare returns across disparate assets and asset classes. The calculation is: (position value plus distributions)/contributions. The result is a ratio showing how many dollars you have based on each $1 invested. A reasoned assumption is made for the liquidation value of an asset with open positions (e.g. the liquidation share price is set at the share price of the most recently booked transaction on the asset). For an asset, the MoM calculation only includes movements of capital in and out of the asset. For an account, the MoM calculation only includes movements of capital in and out of the account.

Example:

If the current market value for an asset is $80, distributions to date equal $40, and total contributions to date equal $90, then the MoM is: (80+40)/90 = 1.33. For every $1 that you invested, you created value of $1.33.

Account Flows

Account Flows represent the movements of all assets in and out of an account. The account flows are broken down by cash flows (i.e. movement of the base currency) and Non-Cash Flows (i.e. movement of anything other than the base currency). Each of those buckets is further broken down by Internal (i.e. movement of assets to another account within the AssetView Portfolio) and External (i.e. movements of assets to outside the AssetView Portfolio).

Liquidation by Mode

Account Assets Return % (XIRR) and MoM Calculations

This calculation includes all of the cash flows from all assets within the account. The calculation does not consider cash transfers in and out of the account and the impact of cash holdings in diluting return on assets. The dilutive impact of cash holdings is evaluated in the Account XIRR and MoM calculations described below.

Account Return % (XIRR) and MoM Calculations

The purpose of this calculation is to evaluate account performance including the dampening impact of cash holdings on returns.

The approach we take to calculate Acc XIRR and Acc MoM is to augment the cash flows from all assets within the account (from the assets XIRR and assets Mom calculation described above) with entries that represent the average daily cash balance in the account during the period.

The start date and end date that are used to scope the term during which the measurement of the average daily cash balance is calculated for each mode follows.

The reason this methodology is employed for performance measurement for a specific Mode rather than cumulating cash flows in and out of the account is because it is infeasible to to assign cash movements discretely to either History Mode or Active Mode. An example of this infeasibility may be seen where an investor puts a lump sum of cash in an account and then over time invests it in equities within the account while also over time transferring funds out of the account to fund investments in other accounts.

While the method employed double counts some cash holdings in History Mode and Active Mode, the approach does provide a conservative, indicative performance evaluation of the dilutive effects of cash holdings within the scope of each of those modes.

Account CashFlow Calculations by Mode

AssetView enables you to evaluate Account cashflows from a date perspective (e.g. between January 1, 2024 and February 1, 2024). We also support an evaluation of Account cashflows with respect to Mode.

The Lifetime Acc CashFlow (Account Cashflow) is the sum of all sends (positive values) and receives (negative values) of the base currency that are external to the portfolio (i.e. that are not transfers within the portfolio).

We use an alternative method for calculating Account cashflows For History Modes and Active Mode because (a) History Mode and Active Mode date ranges often overlap so there is no single separating date between the modes and therefore no date partition for cashflow; and (b) in AssetView, History Mode plus Active Mode always equals Lifetime Mode. The calculations follow.

Acc CashFlows in History Mode = (HM / LM) * LC

Where:

1. HM = History Mode Positions Cost Basis
2. LM = Lifetime Mode Positions Cost Basis
3. LC = Lifetime Mode Positions Cost Basis

Acc CashFlows in Active Mode = (AM / LM) * LC

Where:

1. AM = History Mode Positions Cost Basis
2. LM = Lifetime Mode Positions Cost Basis
3. LC = Lifetime Mode Positions Cost Basis

While the results are approximations, they allow you to compare the use of cash for open positions relative to your use of cash for closed positions.

Performance Matrix

Near the bottom of each account and each asset page is a performance matrix that shows you performance calculations across all Modes.

Asset Exclusion

On an Asset Setup Tab, you may elect to exclude the asset from performance calculations. If elected, AssetView still calculates performance metrics for the asset, but the asset's performance will not participate in aggregated performance calculations that would have otherwise included results from the asset (e.g. performance calculations for the account or accounts in which the asset is held).