Estimates only — not financial, tax, or professional advice.
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What it calculates: Portfolio Return, Total Weight, Top Contribution.
Updated 5 June 2026 · Transparent assumptions
A holding is worth what it is weighted, not one vote each
The three holdings returned 10%, 6% and 4%, whose simple average is 6.67%. But they are held at 50%, 30% and 20%, so the portfolio returned 0.5 × 10 + 0.3 × 6 + 0.2 × 4 = 7.6%. The largest position pulls the result toward its own return.
The contribution figures are the useful output. The first holding contributed 5 points of the 7.6 — two-thirds of the portfolio\u2019s entire return from half its capital. Attribution like that is how you find out whether a good year came from the whole portfolio or from one position, which is a very different thing to rely on again.
Anything else silently rescales the answer
The total weight output exists as a check. Weights summing to 90% compute a return across only 90% of the portfolio, understating it; summing to 110% overstates it. Both produce a clean-looking number with no indication that anything is wrong.
Two common causes: cash left out of the weighting, which is a real holding returning roughly the cash rate, and weights taken at different dates so they no longer reflect one point in time. Both are worth checking before reading the result.
A year of divergent returns moves every position
Weights entered here are a snapshot. Over a year, a holding returning 10% while another returns 4% grows as a share of the portfolio without a single trade, so the weights at the end differ from those at the start. Using end-of-period weights against period returns overstates the contribution of whatever performed well.
The rigorous approach uses beginning-of-period weights, or averages the two for a long period. This is also the mechanical argument for rebalancing: left alone, a portfolio drifts toward whatever has done best, which is usually also what has become most expensive.
Risk, correlation and the effect of adding money mid-period
Portfolio return is a linear weighted average, and returns do combine linearly. Risk does not. Two holdings with 18% and 8% volatility at these weights do not give a weighted-average volatility, because correlation reduces it — which is what the portfolio risk calculator computes.
The calculation also assumes no cash flows during the period. Contributions or withdrawals mean the weighted average no longer describes what you actually earned, and XIRR or a time-weighted return is needed instead.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
DiversificationEffective number of holdings from position weights, using the Herfindahl index — concentration measured rather than counted.
InvestmentProject lump-sum and regular-contribution growth, plan a goal, and solve future vs present value, with fees and inflation.
Regular InvestmentProject how regular monthly contributions grow over time — SIP-style investing, dollar-cost averaging, inflation-adjusted value, and long-term goals.
Retirement WithdrawalEstimate how long savings last under regular withdrawals (SWP) — drawdown, safe withdrawal rate, inflation, and a year-by-year schedule.
Returns are assumptions, not guarantees. Actual results may vary because of market performance, taxes, fees, inflation, and timing. This is an educational projection, not investment advice.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Tested that the weighted return always falls between the best and worst holding, and that the total weight is reported so weights not summing to 100% are visible.
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