Where to input asset return assumptions
Option to use historical asset return data to set return assumptions in RightCapital
Below are assumptions based on historical index return data that you can reference as you set your return assumptions. These assumptions reflect a geometric return calculated from the return data indicated.
RightCapital provides assumptions based on the last 50 years' return data for equity asset classes. For indices that do not have 50 years of data, RightCapital delivers data back to the earliest date that the index is available.
Please review the data below or use your historical data to set your return assumptions.
Asset Class | Interest | Dividend | Capital Gain | 2024 Total Return | Index Data Used |
---|---|---|---|---|---|
Large Growth | 2.00% | 9.10% | 11.10% | S&P 500 Total Return Index: Dec 1973 - Dec 2023 | |
Large Value | 2.00% | 9.10% | 11.10% | S&P 500 Total Return Index: Dec 1973 - Dec 2023 | |
Mid Cap | 2.00% | 8.31% | 10.31% | Russell Midcap Index: Dec 1995 - Dec 2023 | |
Small Cap | 2.00% | 8.33% | 10.33% | Russell 2000 Index: Dec 1980 -Dec 2023 | |
International Equities | 2.00% | 6.62% | 8.62% | MSCI EAFE Index: Dec 1973 - Dec 2023 | |
Emerging Markets | 2.00% | 7.45% | 9.45% | MSCI Emerging Market Index: Dec 1987 - Dec 2023 | |
Real Estate | 2.00% | 7.35% | 9.35% | MSCI US REIT Index: Dec 2009 - Dec 2023 | |
Government | 3.89% | 0% | 3.89% | 10 Year Treasury Bond: Dec 1999 - Dec 2023 | |
Municipal | 4.35% | 0% | 4.35% | Bloomberg Municipal Bond Index: Dec 1999 - Dec 2023 | |
Corporate | 4.05% | 0% | 4.05% | Bloomberg US Aggregate Bond Index: Dec 1999 - Dec 2023 | |
High Yield | 6.33% | 0% | 6.33% | ICE BofA US High Yield Index: Dec 1999 - Dec 2023 | |
International Bonds | 4.05% | 0% | 4.05% | Bloomberg US Aggregate Bond Index: Dec 1999 - Dec 2023 | |
Cash | 1.66% | 0% | 1.66% | 3 Month Treasury Bill: Dec 1999 - Dec 2023 | |
Other | 2.00% | 9.10% | 11.10% | Use S&P 500 as Proxy |
Option to use forward-looking return assumptions in RightCapital
Many financial institutions provide forward-looking return assumptions. Below is summary information from JP Morgan's Long-Term Capital Market Assumptions. You can review the detailed JP Morgan report here ↗️. Other financial institutions provide long-term capital market assumptions.
Asset Class | Interest | Dividend | Capital Gain | 2024 Total Return |
---|---|---|---|---|
Large Growth | 2% | 5.00% | 7.00% | |
Large Value | 2% | 5.00% | 7.00% | |
Mid Cap | 2% | 5.60% | 7.60% | |
Small Cap | 2% | 5.20% | 7.20% | |
International Equities | 2% | 7.70% | 9.70% | |
Emerging Markets | 2% | 6.80% | 8.80% | |
Real Estate | 2% | 5.50% | 7.50% | |
Government | 3.90% | 0% | 3.90% | |
Municipal | 4.00% | 0% | 4.00% | |
Corporate | 5.80% | 0% | 5.80% | |
High Yield | 6.50% | 0% | 6.50% | |
International Bonds | 4.00% | 0% | 4.00% | |
Cash | 2.90% | 0% | 2.90% | |
Other | 2% | 5.00% | 7.00% |
To utilize forward-looking assumptions, click into the fields to modify and enter the preferred data in the Assumptions tab of the Advisor Portal or within the Gear Icon > Settings > Return Assumptions of a specific plan.
Creating your asset return assumptions is easy! Click on the field to modify and enter a new number reflecting your advising philosophy.
As a bonus, RightCapital provides complete control over Inflation assumptions, real estate transaction costs, and assumptions around the costs associated with the death of a loved one.
Considerations to set up your return assumptions
It is essential to set your return assumptions for your clients and review them periodically. Using historical data to set return assumptions provides a systematic approach to factoring the historical experience data into your financial projection. Using a forward-looking approach allows you to incorporate more subjectivity into the projection.