The 'Unit Value' Method of calculating returns

This file demonstrates how to calculate portfolio

returns when there are cash inflows and
outflows.

Original Portfolio with 100 "shares"

Total
Stock Price Shares Investment
ABC 22 75 1650
XYZ 41 37 1517
XXX 47 40 1880
Cash 20
Total 5067
Shares 100
NAV 50.67

Portfolio one month later

Total
Stock Price Shares Investment
ABC 25 75 1875
XYZ 37 37 1369
XXX 48 40 1920
Cash 20
Total 5184
Shares 100
NAV 51.84
Total Return 2.31%

Now, same day, you add $1,000 cash and use it to buy new "shares"
Total
Stock Price Shares Investment
ABC 25 75 1875
XYZ 37 37 1369
XXX 48 40 1920
Cash 1020
Total 6184
Shares 119.29 You can buy 19.29 shares with you $1000 at a NAV of $51.84
NAV 51.84 Note that the NAV doesn't change
Total Return 2.31% And neither does your return
Portfolio one month later
 Total
Stock Price Shares Investment
ABC 26 75 1950
XYZ 35 37 1295
XXX 51 40 2040
Cash 1020
Total 6305
Shares 119.29
NAV 52.85
Total Return 4.31% Note that it looks like you got a return of 24.43% if you use the total value of th

Now, after the close, ABC pays a $1 per share dividend

Total
Stock Price Shares Investment
ABC 25 75 1875 Note: Price goes down by the dividend amount
XYZ 35 37 1295
XXX 51 40 2040
Cash 1095 The dividend goes into cash
Total 6305 Total is unchanged
Shares 119.29
NAV 52.85
Total Return 4.31%

Portfolio one month later

Total
Stock Price Shares Investment
ABC 27 75 2025
XYZ 38 37 1406
XXX 49 40 1960
Cash 1095
Total 6486
Shares 119.29
NAV 54.37
Total Return 7.31%

Now, same day, you withdraw all of your cash

Total
Stock Price Shares Investment
ABC 27 75 2025
XYZ 38 37 1406
XXX 49 40 1960
Cash 0
 Total 5391
Shares 99.15 You "sell" 20.14 shares with to get the $1095 in cash
NAV 54.37 NAV is unchanged
Total Return 7.31% Return is unchanged
at a NAV of $51.84
4.43% if you use the total value of the portfolio instead of the NAV