How is performance calculated for our funds?
We currently have funded and unfunded portfolios displayed on our site. If you want to know why your portfolio performance may be different from the performance reported on our site please click here.
Funded portfolio performance is a more reliable representation of performance than unfunded model performance. Rather than assuming trades at closing prices (or 15 minute delayed prices), funded portfolios are rebalanced in the trading windows following the update of the underlying model, and corporate actions are processed at the same time as in client accounts with all cash distributions to a funded portfolio reinvested in the window next following receipt of the item in the same stock that issued the dividend or cash item. As a result, funded portfolio performance may vary from customer performance due to customers updating their portfolio in different trading windows, changing the securities or the percentage invested in a security they hold from the original list as published ion our site, or not reinvesting dividends or other cash distributions at the same time or in the same manner as the portfolio does.
Unfunded portfolio performance is calculated using the same methodology used on our site to calculate performance for funded portfolios—the Mid-Weighted Dietz Method. At launch, each portfolio has a hypothetical market value, which then changes over time based on the changing value of the underlying holdings. Corporate actions such as dividends, splits, spin-offs, etc., are processed in the same fashion as for funded portfolios, with hypothetical money and shares exchanged rather than real dollars or shares. Unfunded portfolio corporate actions are not validated or audited, which may result in errors in the performance results presented. Cash distributions (i.e., dividends, capital gains, returns of capital) earned in an unfunded portfolio are automatically reinvested into the securities that paid them using the security close price of the date paid.
When unfunded portfolios are rebalanced, buys and sells are calculated to return the portfolio to its target weights—these hypothetical transactions assume a full execution of the shares needed at closing prices or 15 minute delayed prices on the day of rebalance, depending on the time of the update. When the buys and sells cannot be offset exactly the resulting cash difference is hypothetically invested into FDIC.CASH—the symbol for our cash product. In most cases, this cash investment is a negligible portion of the unfunded portfolio and will be hypothetically invested in the target model holdings (if possible) in the next rebalance.
To determine if a portfolio has been funded click on the portfolio name and check the “Date Funded:” under the Performance tab on the right side. If there is a date provided the portfolio has been funded, if “N/A” is shown then the portfolio has not been funded.
The 3- and 5-Year portfolio returns displayed on our site are annualized. We calculate annualized returns using the Compound Annual Growth Rate (CAGR). This calculation will smooth the Total Return of the period into a steady annual growth rate.
For example, if an RTG gained 30% in the first year and lost 10% in the second year then the total return for the 2 year period is 17% (i.e. (1 + 0.30) × (1 - 0.1) = 1.17 -1 = 17%). The CAGR will smooth this return to an annual return of 8.17% a year. Please see the Compounded Annual Growth Rate calculation below.
Funded portfolio performance is a more reliable representation of performance than unfunded model performance. Rather than assuming trades at closing prices (or 15 minute delayed prices), funded portfolios are rebalanced in the trading windows following the update of the underlying model, and corporate actions are processed at the same time as in client accounts with all cash distributions to a funded portfolio reinvested in the window next following receipt of the item in the same stock that issued the dividend or cash item. As a result, funded portfolio performance may vary from customer performance due to customers updating their portfolio in different trading windows, changing the securities or the percentage invested in a security they hold from the original list as published ion our site, or not reinvesting dividends or other cash distributions at the same time or in the same manner as the portfolio does.
Unfunded portfolio performance is calculated using the same methodology used on our site to calculate performance for funded portfolios—the Mid-Weighted Dietz Method. At launch, each portfolio has a hypothetical market value, which then changes over time based on the changing value of the underlying holdings. Corporate actions such as dividends, splits, spin-offs, etc., are processed in the same fashion as for funded portfolios, with hypothetical money and shares exchanged rather than real dollars or shares. Unfunded portfolio corporate actions are not validated or audited, which may result in errors in the performance results presented. Cash distributions (i.e., dividends, capital gains, returns of capital) earned in an unfunded portfolio are automatically reinvested into the securities that paid them using the security close price of the date paid.
When unfunded portfolios are rebalanced, buys and sells are calculated to return the portfolio to its target weights—these hypothetical transactions assume a full execution of the shares needed at closing prices or 15 minute delayed prices on the day of rebalance, depending on the time of the update. When the buys and sells cannot be offset exactly the resulting cash difference is hypothetically invested into FDIC.CASH—the symbol for our cash product. In most cases, this cash investment is a negligible portion of the unfunded portfolio and will be hypothetically invested in the target model holdings (if possible) in the next rebalance.
To determine if a portfolio has been funded click on the portfolio name and check the “Date Funded:” under the Performance tab on the right side. If there is a date provided the portfolio has been funded, if “N/A” is shown then the portfolio has not been funded.
The 3- and 5-Year portfolio returns displayed on our site are annualized. We calculate annualized returns using the Compound Annual Growth Rate (CAGR). This calculation will smooth the Total Return of the period into a steady annual growth rate.
For example, if an RTG gained 30% in the first year and lost 10% in the second year then the total return for the 2 year period is 17% (i.e. (1 + 0.30) × (1 - 0.1) = 1.17 -1 = 17%). The CAGR will smooth this return to an annual return of 8.17% a year. Please see the Compounded Annual Growth Rate calculation below.
