How this number is made
A portfolio return is each weight times its return, added up. The weights should add to 100%. If they do not, the page still multiplies what you typed and shows the total weight, so a hole is visible. Cash you left out is a missing weight, not a zero return, unless you type it.
- A 60/30/10 mix uses 60, 30, and 10.
- Leave a spare sleeve at zero weight if you only have two.
Formula
Return = w₁r₁ + w₂r₂ + w₃r₃, with weights as percents of the portfolio.
Worked example
With the figures already in the form, weighted return is 7.40%.
Questions
Do the weights have to add to 100?
They should. If they add to 90, the result is not the return of the whole account. The row shows the sum.
Can a weight be negative?
Yes, for a short. Then the weights of the longs are usually above 100 so the net still adds to 100.