Suppose I have invested in a Mutual fund (an Liquid Fund) where I have made multiple purchase and redemptions/switch outs. For example, consider the following transactions (in csv format)-

NAV Date,Transaction,Fund House,Scheme,Amount,NAV,Units,Balance Units,Remarks
20-05-2019,Purchase,ICICI Pru,Liquid Fund,"25,00,000.00",279.7851,"8,935.43","8,935.43",
25-06-2019,Purchase,ICICI Pru,Liquid Fund,"25,00,000.00",280.02,"8,927.93","17,863.36",
12-08-2019,Purchase,ICICI Pru,Liquid Fund,"30,00,000.00",282.4699,"10,620.60","28,472.43",
13-08-2019,Switch Out,ICICI Pru,Liquid Fund,"30,00,000.00",282.5045,"10,619.30","17,864.66",Switched out to Ultra Short Term
20-08-2019,Purchase,ICICI Pru,Liquid Fund,"30,00,000.00",282.8117,"10,607.77","28,472.43",
22-08-2019,Switch Out,ICICI Pru,Liquid Fund,"30,00,000.00",282.9057,"10,604.24","17,868.19",Switched out to Ultra Short Term
17-09-2019,Redeem,ICICI Pru,Liquid Fund,"15,00,000.00",284.0449,"5,280.86","12,587.33",
03-10-2019,Purchase,ICICI Pru,Liquid Fund,"25,00,000.00",284.7262,"8,780.37","21,367.70",
03-10-2019,Purchase,ICICI Pru,Liquid Fund,"25,00,000.00",284.7262,"8,780.37","30,148.06",
09-10-2019,Switch Out,ICICI Pru,Liquid Fund,"85,92,602.22",285.0134,"30,148.06",0,

Now how do I calculate the return in the fund for overall transactions?

1 Answer 1


You have the fund values over time

279.7851, 280.02, 282.4699, ..., 284,7262, 284.7262, 285.0134

so the returns from value to value are

0.000839573, 0.00874902, ... , 0., 0.00100869

e.g. the return for the first period

280.02/279.7851 - 1 = 0.0839573 %

Then the true time-weighted rate of return (TWR) of the fund is

(1 + 0.000839573)*(1 + 0.00874902)* ... *(1 + 0.00100869) - 1 = 1.86868 %

However, that is the rate of return over 142 days, so you could annualise it:

(1 + 0.0186868)^(365/142) - 1 = 4.87404 % per annum

In the spreadsheet below the returns and total return are also calculated.

enter image description here

This matches your final, closing cash flow to the dollar:

Net cash flow + total return = 8500000 + 92602

However, if you just want a rate of return, that is best provided by the TWR, and you can obtain that from the NAVs (and overall time period for annualisation).

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