Purpose
UVS is a time weighted performance metric that is used by investment clubs to apportion ownership between investment club members. It enables club members to make flexible monthly contributions (subscriptions) and withdrawals through the process of purchasing and cancelling units. As a performance metric the unit valuation system strength lies in the ability to apportion ownership at any point in time, as club members buy and sell units through making subscriptions and withdrawals. It is an effective means of reflecting changes between day to day investment performance, however it should not be used as a metric for comparing investment performance between for example two Investment Clubs.
When comparing performance money-weighted metrics, it is recommended that you use Internal Rate of Return calculations.
Read more about this topic: Unit Valuation System
Famous quotes containing the word purpose:
“Since I do purpose to marry, I will think nothing to any purpose that
the world can say against it; and therefore never flout at me for what I have said against it; for man is a giddy thing, and this is my conclusion.”
—William Shakespeare (1564–1616)
“Don’t confuse hypothesis and theory. The former is a possible explanation; the latter, the correct one. The establishment of theory is the very purpose of science.”
—Martin H. Fischer (1879–1962)
“No further evidence is needed to show that “mental illness” is not the name of a biological condition whose nature awaits to be elucidated, but is the name of a concept whose purpose is to obscure the obvious.”
—Thomas Szasz (b. 1920)