Vanguard profit/loss calculation?

TUVOK

Can any members please help in explaining how Vanguard calculate profit/loss on a holding?

I hold the vanguard FTSE Dev.World ex UK equity index fund (ACC) , it's current value is £7790-30, the cost is £7241.98, a profit of £548-32
I calculate that the profit is 7.04%

Vanguard sat that the realised gain/loss is £626-58 and the unrealised gain/loss is £548-32, they total this to make a total gain/loss of £1174-90, and state the profit is 35.72%

I do not understand this, can any member explain this please?

george4064

Vanguard use a form of IRR to calculate personal rate of return:

Your rate of return – Your personal performance uses a formula called internal rate of return (IRR), which is a pound-weighted return. IRR takes into account new money coming into your investment, as well as how long that money has been held. Don't confuse your personal rate of return with those posted for funds and indices. The returns shown for funds & indices use a different, time-weighted calculation, which does not take cash flow in consideration.

TUVOK

So am I correct in thinking that my actual % profit on money invested is as I worked out re my figures to be 7.04%?

Notepad_Phil

TUVOK said:

So am I correct in thinking that my actual % profit on money invested is as I worked out re my figures to be 7.04%?

No, that particular profit figure would be 7.57%. I think you have divided the profit by the current-value, it should be divided by the original cost to get the % profit on money invested.

TUVOK

Thanks for that, I intend to work out my profit % using the above method as although Vanguard use another basis to work % profit out, I'm happier with the figure as you advised me.