Mar 13
Triangular Portfolio Performance Returns
At breakfast a few days ago I was talking with two investment professionals when the subject of portfolio returns came up. Both of these professionals told me one needs to see the “Triangular Portfolio Performance” data for a true performance. I’d never heard of this term and wondered if any other readers are familiar with this term.
It is not easy to describe ‘triangular performance’ without pencil and paper. My limited understanding is that one begins some years back with one IRR value. As we move closer to the current reporting period the performance of the latest year is compounded using performance from prior years. The argument for this style of return reporting is that it is much more difficult to hide poor performance and one cannot easily select out a specific time in order to enhance performance returns.
If anyone knows where I may find more information and examples of this reporting, please leave a note on this blog. Thank you in advance.
Lowell Herr