Investment Policy Analyst

Rate Of Return Projections

IPA projects compound rates of return concurrently for as many as ten asset allocations. The allocations can originate from the efficient frontier but this is not required. Six projections are provided for each asset allocation, ranging from worst to best-case possibilities. Time horizons as long as twenty years can be specified. The graphs shown below plot the returns as either a function of asset allocation (for a fixed time horizon) or as a function of time horizon (for a fixed asset allocation).

 Asset Value Projections

IPA projects asset values using the compound rates of return it has calculated. You enter the starting asset value and the contributions and disbursements from the fund for each year in the forecast period. With a starting asset value of 100 and no cash flows, the projections become unit values. The graphs below illustrate this. These calculations are done concurrently with the rate of return projections and, therefore, use the same asset allocation and time horizon specifications.