The performance of your Exo portfolio is calculated using the **time-weighted rate of return (TWRR)**. This method breaks down the total investment period into sub-periods that are defined by potential cash flows. For each sub-period, the TWRR is calculated as follows:

TWRR = (final balance - transfers - initial balance) / initial balance

Then the different rates are compounded to determine the overall TWRR, using this formula:

Total TWRR over n periods = (1 + TWRR#1) x (1 + TWRR#2) x ... x (1 + TWRR#n) - 1

Below is an example which covers an investment period of three months:

Because its formula excludes elements that are unrelated to pure returns created by your investments - like deposits and withdrawals - the TWRR allows you to **easily measure and compare your portfolio to an index or other markets**.

As it is also the most common method to calculate returns on investment products, you are able to compare the performance of Exo's risk management technology with any benchmark that uses the same formula.