modified dietz method การใช้

The modified Dietz method is based upon a simple rate of interest principle.
Some such problems are resolved if the modified Dietz method is further adjusted so as to put purchases at the open and sales at the close, but more sophisticated exception-handling produces better results.
The modified Dietz method has the practical advantage over the internal rate of return method, in that there is a formula for the modified Dietz return, whereas iterative numerical methods are usually required to estimate the internal rate of return.
It approximates the internal rate of return method, which applies a compounding principle, but if the flows and rates of return are large enough, the results of the Modified Dietz method will significantly diverge from the internal rate of return.
However, the modified Dietz method remains useful for performance attribution, because it still has the advantage of allowing modified Dietz returns on assets to be combined with weights in a portfolio, calculated according to average invested capital, and the weighted average gives the modified Dietz return on the portfolio.