Performance

Answer your questions about investment returns, dividends, and comparisons

Table of Contents

How it works

What aspects of performance should I view besides market returns?

It’s important to consider that, while the time-weighted return may be the most helpful type of return figure to use when evaluating your portfolio manager, there are many other factors you should consider when evaluating your portfolio manager. Taxes saved now or at withdrawal from our services like TaxMin, Tax Loss Harvesting+, or Asset Location aren’t reflected in pre-tax returns. Also, you should not expect your time-weighted return over a short time horizon to be representative of the ...

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Types of returns

What are time-weighted returns?

When people look at their returns, one goal is to understand how well Betterment is managing their money. If you want to judge how well Betterment has built your portfolio, the time-weighted return (TWR) is a useful figure to use. When you log into your Betterment account from a web browser and go to the Performance section, at the top right you’ll see your time-weighted return. If you’re logged in on the mobile app, tap “See performance,” select one of your investment accounts, and then look ...

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What is an internal rate of return?

An additional money-weighted return figure displayed in your account is the internal rate of return, or IRR for short. It can be useful to look at in addition to the simple earnings figure. But, it may not to reflect how well Betterment is managing your money (TWR is), because it includes the impact of your deposits and withdrawals. IRR aims to answer the question, “What are the average returns on the dollars I personally deposited into Betterment?” as opposed to “How well does Betterment ...

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What are money-weighted returns?

Money-weighted returns are affected by every cash flow that goes in and out of your portfolio. Cash flows at Betterment include deposits, withdrawals, dividends, and fees. We focus on the main type of money-weighted returns: internal rate of return (IRR). When you log into your Betterment account from a web browser and go to the Performance section, in the bottom left corner you’ll see your “Individual rate of return,” a type of money-weighted return. If you’re logged in on the mobile app, tap ...

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