Guides · Returns and benchmarks

Why your platform's return doesn't match what you made.

Facts checked 15 October 2026

You can be up 8% on the year and still have less money than you put in. That is not a bug in anyone's software. "Return" can be calculated in several ways, and once money goes in and out during the year they stop agreeing, sometimes not even on whether you gained or lost.

Two things cause almost all of the disagreement: when your money went in, and what the pound did while it was invested.

Three calculations, one portfolio

Most return figures you will see are one of these:

Simple return. Gain divided by what you put in. Easy to read, but it treats £1,000 added last week the same as £1,000 invested ten years ago.
Time-weighted return. Chains together the return of each period between deposits, so the size and timing of your deposits have no effect. It measures how the investments did, not how your money did. That is the right test for a fund manager, who does not choose when clients invest.
Money-weighted return, or internal rate of return (IRR). The single annual rate that, applied to every amount you put in and took out on the dates you did it, ends at what you have now. It is what your money actually earned, timing included.

An example

On 2 January you invest £10,000. By 1 July it has risen 20%, to £12,000, and you add £50,000. In the second half the market falls 10%. On 31 December you have £55,800.

You put in £60,000 and you have £55,800. You have lost £4,200.

Time-weighted return: +8.0%. Up 20%, then down 10%: 1.20 × 0.90 is 1.08. The investments did gain 8% over the year.

Simple return: −7.0%. £4,200 lost on £60,000 contributed.

Money-weighted return (IRR): −11.7%. Most of the money arrived just before the fall, and the IRR counts it for the half-year it was actually invested.

None of the three is wrong. They answer different questions. Only the last one answers "how did my money do?" while also accounting for how long each pound was invested. Here the simple return gets the direction right but not the size; the time-weighted return can get both wrong for you, because it was never trying to measure you.

The currency in the middle

If you own anything priced in dollars or euros, which includes most global index funds, your return in pounds is the investment's return plus or minus what the exchange rate did.

Say a US fund rises 15% in dollars over a year in which the pound rises 7.5% against the dollar, so each dollar buys about 7% fewer pounds at the end. In pounds you made roughly 1.15 × 0.93, a gain of about 7%. The fund's factsheet and your account can both be right, and differ by half.

The reverse also holds. A weak pound flatters a year in which the underlying investments did little. Without separating the two you cannot tell whether a good year came from what you chose or from the exchange rate.

Comparing yourself with an index

The published return for an index, such as the S&P 500's or the FTSE All-World's for a calendar year, assumes one lump sum invested on 1 January. If you invested monthly, or added a bonus in June, you did not have that experience even if you held the index itself.

The like-for-like test is to take your own deposits and withdrawals, on the same dates, put them into the index instead, and compare the two money-weighted returns. Both then had identical money on identical dates, and the only difference left is what it was invested in. How to compare your portfolio with an index fairly works through an example.

How Fairworth does it

On the Returns page, Fairworth calculates every return as an IRR on the actual dates and amounts you put in and took out, across all your accounts or any subset of them. Each return is split into three parts: capital growth, income, and currency. Capital and income are measured at constant exchange rates, and currency is what the movement in rates added or took away.

For a benchmark, it puts your own contributions, on your own dates, into the index you choose, measured through an accumulating tracker fund so that the index's dividends are included, and converted into your currency. Returns are shown for a day, a week, one, three and six months, the year to date, one year, five years and since you started. Periods of up to a year show what that period made; longer ones are shown as an annual rate.

Fairworth does not calculate a time-weighted return.

The example is illustrative and uses round numbers; it is not the performance of any real investment. This page is information, not investment advice.