Performance
Performance Across the Hierarchy
AssetView computes historic, current, and projected gains, income, rates of return and multiples-on-money for all levels of the AssetView portfolio hierarchy. Please see Portfolio Hierarchy for detail of the AssetView hierarchy.
XIRR
XIRR stands for extended internal rate of return. An XIRR calculates the internal rate of return using time-based cash flows. Calculating an XIRR across the portfolio, accounts, and assets allows you to compare returns across disparate assets and asset classes. 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:
| Variable | Definition |
|---|---|
| CF_t | The cash flow at time t |
| t | The date of the cash flow |
| T0 | The base date (typically the first cash flow date) |
| r | The internal rate of return (what we solve for) |
| Σ | Summation across all cash flows |
| 365 | Adjusts for the number of days in a year for the actual time-based discounting |
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 or multiple on invested capital, to measure investment performance. The calculation is: (position value plus distributions)/contributions. 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.
Profit Potential
AssetView uses a Profit Potential figure to show how an asset is performing. The figure is a combination of realized gains and income with an unrealized gain. 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. In AssetView, Profit Potential = Realized Capital Gains + Income + Unrealized Capital Gains.
Perspective for Portfolio Cashflows
AssetView views cashflows in and out of a portfolio (i.e. external transactions) from the perspective of you, the investor.
Example:
If you add $100 to an AssetView portfolio from an account not represented in the portfolio, then the portfolio cashflow from this transaction would be -$100.
If later you withdrew $112 from an AssetView portfolio to an account not represented in the portfolio, then the portfolio cashflow from this transaction would be $112.
The cumulative AssetView portfolio cashflow from these transactions would be $12.
Performance Calculations by Mode
History Mode: By definition, in History Mode, only closed positions are included. For History Mode calculations that require a liquidation of the base currency, we use the base currency balance on the date the last transaction booked for a non-base currency asset that qualifies for inclusion in History Mode. To calculate Account Level XIRR calculations in History Mode, we exclude all base currency Send and Receive transactions after that date.
Active Mode: By definition, in Active Mode, only open positions are included. The liquidation date for all asset types including cash is today's date. Because Active Mode does not represent a date range but rather represents active positions regardless of date, and because cashflow for an account is typically based on date ranges, we approximate an Account Cashflow ("Acc Cashflow) in Active Mode as follows:
Acc CashFlows in Active Mode = (Active Mode Positions Cost Basis / (History Mode Positions Cost Basis + Active Mode Positions Cost Basis)) * Lifetime Acc CashFlow
Lifetime Mode: The Lifetime 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).
Projected Modes: The liquidation date for all asset types including cash is the the projected date that you set.
Allocating Transactions to Modes
Transactions other than Buys and Sells (e.g. Income and Expenses) are allocated to lots that are open at the time the Income or Expense transactions occurs. The allocation is proportionate to the shares within each lot. If Income and Expenses arise when there are no open lots, the Income and Expenses are assigned to a placeholder lot such that those Income and Expenses are included in asset and account performance calculations. There are two exceptions to this behaviors:
- Fees that are embedded into specific Buy or Sell transaction are allocated in the same way as the Buy or Sell is allocated.
- Cash Send and Receive transactions are allocated across History Mode and Active Mode. The allocation for History Mode is calculated as the total value of all Buy and Receive transactions in History Mode divided by the total value of all Buy and Receive transactions in Lifetime Mode. The allocation for Active Mode is calculated as the total value of all Buy and Receive transactions in Active Mode divided by the total value of all Buy and Receive transactions in Lifetime Mode.
Performance Matrix
Near the bottom of each asset page is a performance matrix that shows you asset performance across all AssetView modes.