In other words, whereas the time-weighted return focuses on managers, the dollar-weighted return centers on the investor’s actions. Thus, comparing returns and the performance between portfolio...

In other words, whereas the time-weighted return focuses on managers, the dollar-weighted return centers on the investor’s actions. Thus, comparing returns and the performance between portfolio managers (who may initially start with investments in identical portfolios but one portfolio experiences changes during the evaluation horizon) may be difficult, which is our task under examination in this section.