The Rate of Return (ROR) calculation is not the same as a simple gain or a loss calculation and uses the Modified Dietz Method of ROR calculation, which is AIMR (Association for Investment Management and Research) compliant. The Modified Dietz method provides an estimate of a true Time-Weighted Rate of Return by weighting each cash flow by the amount of time it has been held in the account, and eliminates the need to know the value of the account on the date of each cash flow. For a detailed explanation and a numerical example of this calculation methodology, please review the "Rate of Return FAQ" available in the Forms & Reports >> Forms section of your Participant Portal (http://login.rpgconsultants.com).
The rate of return displayed in your account is a personalized figure, which takes into consideration each Participant’s individual account activity and cash flows. Rates of return reported by Fund providers and/or portfolio managers will not reflect the same individualized level of activity and cash flows. Fund providers and/or portfolio managers report a composite figure based on the totality of all investor accounts (both individuals and institutional investors) and may operate with different assumptions (full investment for the duration of the timespan being examined with no incremental activity or reallocations.)
Differences between individuals’ personalized returns and that of composite returns are known as dispersion. Reasons for dispersion include:
Differences in the dates and sizes of deposits and withdrawals between different accounts for which returns are being calculated.
Differences in the precise timing of trades being made in different accounts.
Differences in the rate of return calculation methods, for example Dietz modified versus true time weighted, though both are AIMR compliant.
Your personalized rate of return information is available to you on the Participant Portal from the Performance >> Rate of Return page. There, you can examine your ROR in monthly, quarterly or annual increments; and you can run a rate of return calculation for a custom period (such as year-to-date or inception-to-date). Rates of Return are, by default, displayed for your overall portfolio; but you can single-out an individual fund from the “Investment Type” menu.