Compare the two as the performance measures. Advantages and disadvantages?
MWR is simplier to compute with less data requred but is biased upward for large deposits before good returns TWR is more accurate and unbiased bt requires valutations of portfolio at time of cashflows ( more data intensive)
MWR better when PM controls the CF (PE and RE unds) TWR better measure as it encompasses all cash flows TWR can be cumbersome if CFs occur daily MWR is done via a computer (IRR calc) MWR skews returns if large CF occurs just prior to a large increase/decrease in the portfolio
MWR calculates the average grwoth of all dollars while TWR reflects a single unit of money initially invested in the account
MWR could be deemed preferable if the portfolio manager can choose the timing of capital contributions.