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Suppose we have a portfolio with many assets.

Since this portfolio receives monthly contributions and withdrawals, what is the best method to evaluate its global rate of return and avoid computing these contributions as a "profit" and withdrawals as "losses"?

I've already seen some people using abstract entities (e.g.: we may define that we start with 100 entities, and, for a \$100 portfolio, each entity would cost \$1), but I don't know the name of this method in English.

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    $\begingroup$ I think you are probably referring to the "NAV per unit" method of computing Time Weighted Returns. ("units" = what you call "entities"). It is the method used by US Mutual Funds, but is difficult to find clear explanations. I made an attempt here quant.stackexchange.com/questions/44594/… $\endgroup$ – noob2 Aug 12 '20 at 21:50
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    $\begingroup$ Another even better article is here quant.stackexchange.com/questions/55466/… where the same method is dicussed for partnership accounting $\endgroup$ – noob2 Aug 12 '20 at 21:55
  • $\begingroup$ That's exactly what I was looking for! Thank you @noob2 $\endgroup$ – Vinícius Lopes Simões Aug 13 '20 at 0:24
  • $\begingroup$ vote if you found anyone's comments or answers useful $\endgroup$ – develarist Aug 13 '20 at 23:16
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Usually this would be evaluated using an internal rate of return, the rate $r$ which makes the PV of inflows and outflows equal -- assuming a starting inflow of portfolio value at the start date and an outflow as though the portfolio were liquidated at the end date.

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