Modified Dietz Method

The modified Dietz method is a calculation used to determine an approximation of the performance of an investment portfolio based on money-weighted cash flow. In the absence of daily portfolio valuations, the modified Dietz method weights individual cash flows by the amount of time from when those cash flows occur till the end of the period. A more precise way of calculating performance in the presence of external cash flows remains True Time-Weighted Rate of Return.

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