Meaning and comparison
MWR describes the result while taking into account how much capital was invested and for how long it worked. It is often calculated as the internal rate of return of a sequence of external cash flows and the ending valuation. FINRA explicitly calls IRR a money-weighted measure.[1](#source-savx-returns) Here, the document’s mathematical concept is used, not its regulatory requirements from 2020.
If a large contribution occurs just before a losing period, the owner’s money-weighted experience may be worse than the time-weighted result of the strategy. This is not an arithmetic error and does not automatically prove either the quality or the incompetence of the manager.
Calculation limits
The calculation requires dates, signs, cash amounts and a clear portfolio boundary. IRR may have multiple solutions or no suitable solution; one number produced by a calculator does not remove these limits. MWR is not a guarantee of future return. For a comparison, state the rate unit, horizon, expenses and method used to value remaining assets. Related reading: [IRR](/glossary/irr/), [NPV](/glossary/npv/) and [dividends and total return](/guides/dividends-total-return/).