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Our Performance Calculation Methodology

Learn how Navexa calculates returns using the Modified Dietz Method, the industry-standard for portfolio performance.

Navarre Trousselot avatar
Written by Navarre Trousselot
Updated over 2 months ago

Behind Navexa’s analytics and charts is one guiding principle:

You should be able to log in and instantly see how your portfolio is really performing.

To achieve this, we use an industry-standard calculation method that balances accuracy with transparency.


Why Performance Can Differ

There are many ways to measure investment performance. That’s why what you see in Navexa may not always match figures from your broker or another platform.

The difference comes down to methodology. Navexa uses the Modified Dietz Method.


The Modified Dietz Method

The Modified Dietz Method is widely used by fund managers and investment firms because it:

  • Weighs performance by cash flows (deposits and withdrawals).

  • Adjusts for the size and timing of those cash flows.

  • Provides a more accurate, dollar-weighted return than simpler methods.

The Formula

ROR = (EMV-BMV-C) / (BMV + W*C)
  • ROR = Rate of Return

  • EMV = Ending Market Value

  • BMV = Beginning Market Value

  • C = Cash Flow

  • W = Weighting of each cash flow by time

In plain English: It looks at where you started, where you ended, and how much cash you added or removed (and when).

Annualisation

On top of Modified Dietz, Navexa also annualises your returns. This lets you compare investments held for different periods of time.

Example

  • 01/01/2018: Buy 1,000 shares @ $2.00 = AUD $2,000

  • 31/12/2018: Buy 1,000 shares @ $2.20 = AUD $2,200

  • 31/12/2019: Sell 2,000 shares @ $2.30 = AUD $4,600

Capital Gain = $4,600 – $2,200 – $2,000 = AUD $400
Total Capital Invested = AUD $4,200

We then calculate Average Years Invested (AYI):

AYI = (730 days * 2,000/4,200) + (365 days * 2,200/4,200) = 538.19/365 = 1.47 years

Finally, the annualised return:

Total Return = Gain / Total Capital / AYI = 400/4,200 / 1.47 = 6.47%


Why We Use This Method

  • It’s recognised across the financial industry.

  • Regulators and watchdogs (via the Investment Performance Council’s Global Investment Performance Standards) recommend it.

  • It provides transparency and comparability for investors at every level.

In short: It’s accurate, fair, and trusted worldwide.


Key takeaway: Navexa uses the Modified Dietz Method plus annualisation to give you the clearest, most reliable picture of your portfolio performance.

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