Leading domestic brokerage Zerodha on Friday, April 11, launched an all new feature of ‘portfolio performance curve’ for traders to track their account performance on the platform’s ‘Console’. Zerodha co founder and chief executive officer (CEO) Nithin Kamath said Zerodha is ‘probably the only broker to offer this feature in India and possibly worldwide.’
Nithin Kamath took to microblogging platform ‘X’ (formerly Twitter) and said, “We at Zerodha just launched Portfolio Performance Curve on Console. This allows you to visualize your account performance, and you can compare it to a benchmark like Nifty 50. We’re probably the only broker to offer this feature in India and possibly worldwide.
The performance curve is calculated in a similar way to the NAV of mutual funds. The daily NAV is calculated using the P&L of all trades across equity intraday and delivery, F&O, commodities, MTF, and mutual funds based on the cash in the account.
The idea with benchmarking is to show you that if you are underperforming, maybe investing in an index fund would be better for you.
It was on our list of things to do for a long time, but there were way too many moving pieces, and it got delayed.”
Zerodha’s new feature: Portfolio Performance Curve
The Portfolio Performance Curve shows the actual performance of investments and trades (equity, mutual funds (MF), MTF, F&O, intraday, and commodities) after accounting for cash inflows and outflows.
Looking at the absolute P&L of the portfolio does not tell anything about the performance because it is just a snapshot in time. To accurately assess the portfolio’s performance, one needs to analyse returns over time while excluding cash inflows and outflows, then compare this performance against a reasonable benchmark.
That is why, to help traders understand their investment and trading performance accurately, the brokerage is introducing the Portfolio Performance Curve on Console. This feature, now available for the first time to Indian investors, separates the actual investment and trading performance while adjusting for cash inflows and outflows, providing a more accurate picture of how your trading account is performing.
What is the Portfolio Performance Curve?
Similar to how mutual funds use an NAV curve to represent performance, the Portfolio Performance Curve applies the same principle to the entire trading account. It shows how investments and trades (F&O and intraday) are performing over different time periods and lets traders compare their performance with the NIFTY 50 index in a simple, visual way.
How the Performance Curve works
The Portfolio Performance Curve starts with a base Net Asset Value (NAV) of ₹1,000. This is set from July 1, 2022, or from the date your account first reaches ₹1,000—whichever comes first.
When you add money to your account, new units are created based on the previous day’s NAV. Similarly, when you withdraw funds, units are reduced from today’s NAV. This ensures that your performance curve only includes your actual investment and trading returns, not cash inflows or outflows.
