# How to calculate the net return of each "partner" at different times?

Let's suppose I am starting to manage some money. The money is invested in ETFs, particular de VOO.

Let's suppose I have partner one with 1,000 USD, and with this, I can buy 10 shares of VOO at 100 USD price per share. (not real price). My average price per share would be 100 USD.

Then, another partner 2 gives me 2,400 USD, and I buy more shares of the same ETF, but this time at 120 USD per share. This would update my average price from 100 to 113 per share.

In 3 months, the price of the ETFs will gain 5%, (again, fictional), and the "partner 1" wants to subtract his money at a price of 126 per share.

This means a 5% gain at the price of the partner 2 and 26% gain at the price of the partner one. And more importantly, it means 11.50% gain over the average price of the portafolio.

How should I return (or how much) to the partner one? Over his 26% percent or over 11.5% of the total portfolio?

• Whether you manage money as individual accounts, or as an ETF, or mutual fund, the result is the same: each partner gets the performance that corresponds to their entry and exit point (not based on some kind of meaningless average). This is a legal (and ethical) requirement. You cannot take the profits made by A and give some of them to B. If there are some common costs they have to be allocated fairly to all. Jul 6, 2020 at 0:18