Instructor: David D. Spaulding, DPS, CIPM

Learn the various formulas to derive performance; understand the impact of cash flows and learn about time- and money-weighting. Students also learn geometric linking, annualization, and much more.

• • Why we measure performance the way we do.
• • Insights into the history of rates of return, in general, and time-weighting, in particular.
• • The history review will include a discussion on the contributions of Peter Dietz and the evolution of the approaches he developed, as well as those of the Bank Administration Institute, and the methods they developed and recommended.
• • An in-depth discussion of both approximation and exact time-weighting methods, with examples and exercises.
• • An introduction to the internal rate of return (IRR) and its different approaches.
• • A discussion on what the differences are between time- and money-weighting, and when each should be used.
• • A review of real-life examples to contrast time- and money-weighting, so that the students can better understand their strengths and shortcomings
• • We will go over the mechanics behind compounding and why we compound the way we do.
• • We will go over the ways to annualize rates of return, how we accomplish it over variable time periods, and the general rules surrounding its usage.