Hubwise Performance Reporting Explained

Hubwise calculates investment performance using the time-weighted return (TWR) method. This approach is widely used in the industry because it gives a fair view of how the underlying investments are performing without being affected by when or how much money is added or withdrawn.

TWR measures the compound growth rate of a portfolio over time. It breaks the investment period into smaller segments (called sub-periods) whenever money is deposited or withdrawn. This helps isolate the actual performance of the investments from the impact of cash flows.

1. Each sub-period starts when there's a deposit or withdrawal.
2. The return for each sub-period is calculated separately.
3. These returns are then linked together by multiplying them, which gives the overall time-weighted return.

This method ensures that performance comparisons between portfolios are fair even if investors added or withdrew money at different times.

The time weighted return calculations are as follows:

n = Number of sub˗periods

HPR (Holding Period Return) = (End Value − Initial Value + Cash Flow) ÷ (Initial Value + Cash Flow)

HPRn = Return for sub˗period

Time˗weighted Rate of Return = [(1 + HPR1) × (1 + HPR2) ... × (1 + HPRn)] − 1

As the time-weighted return eliminates the effects of portfolio cash flows on returns here are some examples to show how this works, consider the following two investor scenarios.

Example One

Investor 1 invested £1,000,000 into Model A on 31/12/2018.

On 15/08/2019 the portfolio is valued at £1,162,484.

On 15/08/2019 a £100,000 top-up is added, bringing the total value to £1,262,484.

On 31/12/2019 the portfolio has decreased in value to £1,192,328.

The holding-period return for the first period 31/12/2018 to 15/08/2019, would be calculated as:

Return = (£1162484 − £1000000) ÷ £1000000 = 16.25%

The holding-period return for the second period 15/08/2019 to 31/12/2019 would be calculated as:

Return = (£1192328 − (£1162484 + £100000)) ÷ (£1162484 + £100000) = ˗5.56%

The time-weighted return over the two time periods is calculated by geometrically linking these two returns:

Time˗weighted return = (1 + 16.25%) × (1 + (˗5.56%)) − 1 = 9.79%

Example Two

On 15/08/2019 the portfolio is valued at £1,162,484.

On 15/08/2019 they withdrew £100,000 from the model, bringing the total value down to £1,062,484.

On 31/12/2019 the portfolio has decreased in value to £1,003,440.

The holding-period return for the first period 31/12/2018 to15/08/2019 would be calculated as:

Return = (£1162484 − £1000000) ÷ £1000000 = 16.25%

The holding-period return for the second period 15/08/2019 to 31/12/2019 would be calculated as:

Return = (£1003440 − (£1162484 − £100000)) ÷ (£1162484 − £100000) = ˗5.56%

The time-weighted return over the two time periods is calculated by geometrically linking these two returns:

Time˗weighted return = (1 + 16.25%) × (1 + (˗5.56%)) − 1 = 9.79%

As both these examples are time weighted returns, the investors in both examples received the same 9.79% time-weighted return despite one adding and the other withdrawing money from their accounts.

With a time-weighted return, which is an industry standard return calculation, it is entirely possible to have a negative % return, despite having a net gain on your investments (or conversely, a positive % return with a net loss on your investments).

A time-weighted return assesses the performance of the underlying investments without being distorted by the timing or size of cash flows in and out of the portfolio (i.e. deposits and withdrawals). 

Your time-weighted return is negative because the underlying portfolio that you are invested in has decreased in value since you began investing. However, your earnings are positive because you deposited the majority of your current investment 

when the value of your underlying portfolio was lower than it is now.

Here's an extreme example to illustrate this: 

£10 invested to start, and the market loses 50% and there is now £5 in the portfolio. 

An additional £100,000 is made into the portfolio followed by a market rise of 10%. 

In this case, I would have a positive gain on the portfolio of about £10,000 which is much more than my initial £5 loss. 

However, as most of my money was invested after a large market fall the time-weighted return is negative because my portfolio performed badly and therefore my simple return is still positive but due to the timing of the cash flows this would result in a negative time-weighed return. 

Users can define the period over which to show the performance of an account in the portal. Whilst the user can select specific dates, the performance reports can only be run from specific points, these are:

• The month end value of the account on any month end since account inception. 
• The date of every cash movement (contribution or withdrawal (not dividends or charges) or stock movements on the account.
• Any date in the last 35 days

The start date for the portfolio performance is the earliest date available within the period of selection where there is a market valuation data point for the portfolio.  

Example run on 22 October 2025: 

The dates requested were 6th April to 16th September.  The actual dates used are 30th April as the month end after the date requested and 31st August which is the last month end date valuation that can be used

When selecting the current date as the end date this is then correct as its within the last 35 days.  The start date is still 30th April which is the month end date after the date requested