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Investment Portfolio Model Returns Assuming You Charge Your Clients "Average" Investment Advisory Fees |
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Investment Portfolio Model Returns Assuming You Charge Your Clients "Average" Investment Advisory Fees |
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Below are the actual returns for the same model portfolios assuming your total annual investment management fees and trading expenses are 1.0%, which is considered average. This is not the mutual fund/life insurance company management fee, it's the fees an investment advisor that actively manages the money would charge. The financial tool that figures the amount of quarterly or annual investment management fees due to the advisor, is on the financial tools module. It's a good example of what's "average" when investment advisors use a multiple-tiered approach to fees. Investment management fees are assumed to be deducted from the cash account on the first trading day of every new quarter. For example, if the total annual fee (total fee plus total trading costs) is 1.00%, then 0.25% of the account's balance on the last trading day of the previous quarter, is deducted from cash. There is no cash in the Aggressive Investment Model, so some of the bond fund is sold to pay fees. These returns are not "hypothetical" as they are shown in the "demo." These are the actual returns from inception (January 1999) showing the returns as if you invested in January 1999, then made no more deposits or withdrawals, reinvested all capital gains and dividends, rebalanced on the first trading day of every new quarter and when allocation weights changed, and switched all of the funds on the first trading day of the month after the switch was announced. You'll receive the spreadsheet showing all fund switches and return data (so you can audit them yourself) when you purchase the Asset Allocation Model. These three Excel spreadsheets are called Linked Model Returns.xls. Input your assumed annual investment management fees, and assumed annual trading costs, into the far left sheet of the Fee-Based Model, and all of the returns are automatically adjusted. The most Real World thing to do is compare the Moderate Model with the S&P 500. The longer the time frame, the more pronounced the benefits of asset allocation. Click here to see the table of returns assuming no annual management fees Click here to see the table of returns assuming 0.5% annual management fees (low) Click here to see the table of returns assuming 1.5% annual management fees (high) Click here to see the table of returns for the No-Load mutual fund Model (for investors mostly) Click here to see the table of returns for the Load Model (for pros working on a commission basis) |
Time Frames |
Conservative Model | Moderately Conservative Model | Moderate Model | Moderately Aggressive Model | Aggressive Model | DJIA |
S&P 500 |
NASDAQ |
Russell 2000 |
MSCI EAFE |
Lehman Brothers Agg Bond |
1999 |
25.83% |
37.21% |
48.69% |
64.62% |
85.37% |
25.22% |
19.53% |
85.59% |
21.26% |
27.30% |
-0.83% |
2000 |
4.50% |
-1.04% |
-6.10% |
-7.53% |
-9.80% |
-6.18% |
-10.14% |
-39.29% |
-3.02% |
-13.96% |
11.63% |
2001 |
3.66% |
2.62% |
2.97% |
1.91% |
1.42% |
-7.10% |
-13.04% |
-21.05% |
2.49% |
-21.21% |
8.42% |
2002 |
-3.03% |
-11.04% |
-19.80% |
-26.75% |
-32.01% |
-16.76% |
-23.37% |
-31.53% |
-21.58% |
-17.52% |
10.27% |
| 2003 | 21.88% | 30.24% | 35.80% | 39.56% | 40.41% | 28.28% | 28.68% | 29.28% | 47.25% | 17.41% | 4.11% |
| 2004 | 11.71% | 13.79% | 14.95% | 15.88% | 15.21% | 5.32% | 10.87% | 8.59% | 18.33% | 10.18% | 4.34% |
| 2005 | 9.84% | 11.63% | 13.10% | 14.21% | 13.86% | 1.72% | 4.91% | 1.37% | 4.55% | 25.96% | 2.43% |
| 2006 | 11.69% | 13.66% | 15.59% | 16.56% | 16.60% | 19.05% | 15.79% | 9.52% | 18.37% | 13.81% | 4.33% |
| 2007 | 14.89% | 19.68% | 21.30% | 22.13% | 21.66% | 8.89% | 5.49% | 9.81% | -1.57% | 11.17% | 6.97% |
| The Month of July '08 | -2.86% | -3.74% | -4.24% | -5.00% | -4.70% | 0.43% | -0.84% | 1.42% | 3.70% | -3.21% | -0.08% |
| 2008 YTD (31 Dec '07 to 31 July '08) | -2.58% | -5.30% | -7.60% | -9.73% | -10.96% | -13.00% | -12.65% | -12.32% | -6.02% | -13.82% | 1.04% |
| Last 12 Months | 4.22% | 2.96% | 0.54% | -1.72% | -3.11% | -11.71% | -11.09% | -8.67% | -6.71% | -12.19% | 6.15% |
Last 3 Years Annualized Average |
8.11% | 9.69% | 10.59% | 10.78% | 10.36% | 4.70% | 2.85% | 2.10% | 2.92% | 10.50% | 4.37% |
Last 5 Years Annualized Average |
9.92% | 11.87% | 12.98% | 13.52% | 13.11% | 6.67% | 7.03% | 6.03% | 9.75% | 15.36% | 4.55% |
| Annual Average Since Inception (31 Dec '98 - Monthly compounding) | 8.59% | 9.31% | 9.34% | 9.60% | 9.54% | 4.38% | 1.98% | 0.62% | 7.00% | 5.36% | 5.44% |
Last 3 Years Cumulative |
26.34% | 31.96% | 35.27% | 35.94% | 34.40% | 14.78% | 8.81% | 6.44% | 9.03% | 34.93% | 13.71% |
Last 5 Years Cumulative |
63.88% | 80.48% | 90.67% | 95.87% | 91.96% | 38.13% | 40.44% | 34.04% | 59.26% | 104.26% | 24.92% |
Cumulative Since Inception (31 Dec '98 - Monthly compounding) |
127.03% | 143.13% | 143.80% | 150.12% | 148.48% | 50.74% | 20.62% | 6.06% | 91.17% | 64.90% | 66.07% |
| Conservative Model | Moderately Conservative Model | Moderate Model | Moderately Aggressive Model | Aggressive Model | DJIA |
S&P 500 |
NASDAQ |
Russell 2000 |
MSCI EAFE |
Lehman Brothers Agg Bond |
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