I question MorningStar report not about the data but the results used to incorrectly interpret the preference between TWR versus MWR. If we need to know which method is better for the investors, the correct analysis should be to understand why the flows happened and not used the model return results for explanation. We unconsciously treat MWR as an investor’s return but MWR can only be compared to other portfolio returns when certain conditions are met. Are investor aware about this limitation (TWR has its own limitations as well)?

When there are no flows and both MWR and TWR have identical returns, MWR would use identical return over the entire period where as TWR incorporates each periods returns. Thus, MWR is no better than TWR unless we understand why the flows happened.