Auditing portfolio performance

[weijian]

Hi d.o.g.

Thank you for your generous sharing. I managed to calculate my performance using XIRR. It was easier than I thought, and perhaps easier than the NAV method as well. I didn't take too long as my turnover/transactions was very low. I totaled the cashflow for each year, and assumed I had sold all my holdings using the last traded prices for the final cash in-flow. I hope I didn't do it wrongly.

Do you know auditors who are willing to do such a small scale work?

Personally, i have only tried using the XIRR method, although i do understand how both XIRR and NAV works. I thought NAV (never tried it before) is harder to setup for calculations because I will need to "create new units" every time there is a cash in/out fusion while XIRR just requires either a "negative or positive" figure to it. That said, NAV, as the end result, is intuitively easier to understand for outsiders than XIRR, since one can easily benchmark it to 1.00 as the starting point.

I don't think you will need to engage an auditor to do your work. You could simply play around with a few hypothetical numbers that run parallel to your actual numbers using the same calculations. The hypothetical numbers can range from small to large and then you see the variations in the outputs and then you will know whether you are "approximately right" or "accurately wrong".