How Embark Calculates your Performance Return

When you log into your Embark account and navigate to the “performance” page, you will notice there are a few different types of investment returns. The top left portion of your performance page will show a graph that illustrates the balance of all of your accounts compared to the amount invested. Below the graph under “balance details” you will be able to see all of the details such as the net deposits and the earnings. The earnings section is broken down between market changes, dividends, and management fees. Directly below this, you will see a section titled “Money-weighted Returns” which is broken down between Simple Earnings Percent and Internal Rate of Return.

Embark has partnered with Betterment for Advisors as our technology partner & Custodian. Betterment calculates the returns for Embark accounts.

Money-Weighted Returns

Money-weighted returns are personal to you. The term reflects precisely what it is, a return that represents the return you have actually realized. Betterment calculates two types of money-weighted returns, the simple earnings percent and the internal rate of return. The simple earnings percentage takes how much you’ve earned and divides it by how much you have invested. Please note however, that the simple earnings percent can sometimes be misleading, especially if you have had any large cash inflows or outflows into your account and it should not be used to compare portfolios unless the two portfolios have had the exact same cash inflows and outflows. Due to the shortfalls of the simple earnings percent, Betterment also calculates a money-weighted return called the internal rate of return. The internal rate of return is an “all-in” personal return that accounts for the size and timing of deposits and withdrawals.

Time-Weighted Investment Returns

A time-weighted investment return is a measure of the compound rate of growth of a portfolio. It is often the preferred measure of a portfolio’s return over money-weighted returns, because it eliminates the distorting effects on the rate of return caused by money inflows/outflows.

The time-weighted rate of return allows for a fair assessment of the portfolio and allows for easy comparison between two investment portfolios. A time weighted rate of return can also be thought of as the simple return of the first deposit into the investment account.

Example of a Positive Time-Weighted Investment Return and Negative Earnings:

Suppose you invest $100 into an investment account and in the first year the portfolio gains 100%. At the end of year 1 you have $200 in your investment account. You then deposit $10,000 into the account and the portfolio loses 10% in year 2. You would have $9,180 at the end of year 2 with a positive time-weighted rate of return of 80% and a negative earnings of $920.

*This example is hypothetical and provided solely for educational purposes. It does not represent the return of any actual Embark client or portfolio

Have questions?

If you have any questions about holdings in your account or one of our models, or perhaps have another question about our services, you can contact us directly at 920.785.6012 or email us at clientservices@embark-invest.com.  Betterment maintains a support line you can also call for help with navigation, linking your accounts or other site functionality. You can call the Betterment for Advisers support line at 800.400.1571.

Last updated June 4, 2025

Disclosures: Content contained herein is presented for informational and educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of individualized investment, tax, or legal advice.

Embark is a digital investment service advised by ETF Model Solutions, LLC.  Investments recommended by Embark involve risk and will fluctuate in value.  Unless otherwise stated, investments are not insured or guaranteed. May lose money. Embark utilizes the platform and technology services of Betterment LLC, an SEC Registered Investment Adviser.  Betterment provides the wrap fee program that assists us in providing our services to you. Custody and trading services for the program are provided by Betterment Securities, an SEC registered broker-dealer and member FINRA/SIPC.

Embark’s services are specific to the investment goals that you identify.  We do not provide comprehensive financial or tax planning. Our Advisory services rely upon an algorithm designed and maintained by Betterment to assist us in determining our portfolio recommendations.   Unless you directly consult with Embark Advisory personnel, the algorithm is the sole basis of the advice. You should not rely solely on the Betterment advice algorithm’s recommendation to make your investment decisions. Embark strongly advises all Clients to speak directly with an Embark IAR prior to making any investment decisions.

All tools and content on the Betterment, LLC website, are designed, created, and maintained by Betterment. Certain functionality, tax-coordinated portfolios and links to investment philosophy, research, educational materials, and FAQs apply solely to betterment’s 2-dimensional portfolios and may not apply to Embark’s 3-dimensional investment recommendations.

Existing Embark clients are reminded to login and update personal information whenever their goals or personal financial circumstances change.  Clients should also confirm that their current goal allocation is aligned with the recommended target allocation provided for each goal. Clients with questions regarding their account, personal financial circumstances, goals, or an investment allocation with respect to our service should contact us via email or telephone.

Prospective clients contemplating opening an account with Embark are advised to read Embark’s Form ADV Brochure, Part 2A for important disclosures about our services, business practices, the costs, and risks of investing, and other important considerations prior to opening their account.  You can access the most recent version of our Form ADV via a link on our website.

ETF Model Solutions, LLC. is registered as an investment adviser with the SEC.  Registration does not imply a certain level of skill or training.  If you have any questions about our professional services, please call us at 920.785.6012 or email clientservices@Embark-Invest.com