How to display the total account market value during an ongoing order settlement cycle?
Total Account Market Value = Balance + Value (all settled fund units × last closing price) + Sum of pending subscription cash amounts
Definitions:
- Balance — Snapshot of settled cash on the account.
- Value — Total market value of settled fund positions = Σ(units held × Last closing price per fund).
- Pending subscription cash amounts — Cash you've sent/allocated that hasn't been converted into fund units yet.
- Pending redemption units — Units instructed to redeem but not yet settled; value them at Last closing price if they're not already included in Value.
- Last closing price — Most recent published NAV per fund (last known close).
Example:
- Balance: 25,000 SEK
- Value of settled positions: 80,000 SEK
- Pending subscription orders (amount): 10,000 SEK
- Pending redemptions orders: 1,000 units of Fund A
- Last close Fund A: 100
Total Account Market Value = 25,000 + 80,000 + 10,000 + (1,000 x 100) = 215,000
What model does Fondo use for portfolio performance calculations?
Two main approaches are typically used for presenting performance over time for a portfolio of fund holdings - Time-Weighted Return (TWR) and Money-Weighted Return (MWR).
Performance of the investments themselves, independent of the timing/size of client deposits and withdrawals (matches how fund factsheets report).
How it's computed (conceptually):
- Split the timeline at every external cash flow.
- Compute a sub-period return for each flow-free segment.
- Chain (geometrically multiply) the sub-period returns.
Sub-period i:
rᵢ = (UBᵢ − CFᵢ) / IBᵢ − 1Chain across n sub-periods:
TWR = ∏(1 + rᵢ) − 1
for i = 1 to nPros/Cons & usage:
- ✅ Neutralizes client cash flows → fair view of manager/strategy skill.
- ✅ Standard for public performance comparisons.
- ⚠️ Not the investor's personal experience if they time cash flows poorly/well.
The investor's actual, cash-flow-timing-aware return on capital. Formally the internal rate of return (IRR) of all dated cash flows:
Σ CFₜ / (1 + r)^(t/T) = 0CFₜare dated cash flows (deposits positive, withdrawals negative; final value treated as an outflow).Tnormalizes time units (e.g., days per year).
Practical approximation — Modified Dietz:
r_MD = (EV − BV − Σ CFₖ) / (BV + Σ wₖ × CFₖ)BV= beginning value,EV= ending valueCFₖ= each external cash flow during the periodwₖ= time weight for each flow (fraction of the period remaining after the flow)
Pros/Cons & usage:
- ✅ Reflects the client's real, dollar-weighted outcome.
- ✅ Useful for personal statements, planning, and advisor reviews.
- ⚠️ Not ideal for comparing manager skill (timing dominates).
- ⚠️ IRR can be non-unique or fail with certain cash-flow patterns; Modified Dietz is a robust proxy.
- Displayed portfolio performance (%) — TWR: We present time-weighted return, consistent with fund factsheets and isolated from external cash flows.
- Client-specific performance — MWR/IRR is not supported. For questions like "How did my money grow given when I invested?" you'd use a money-weighted method rather than TWR.
Note: Beyond deposits and withdrawals, other events (e.g., corporate actions, distributions, and fees) can affect performance and must be taken into account to ensure adequate TWR calculations.