Assumptions and methodology
This hypothetical example assumes a starting investment of $5,000 and monthly contributions of $100. The annual rate of return is calculated from 20 years of historical monthly index return data based on a hypothetical moderate growth and income portfolio. Weak and strong markets are calculated based on 2 standard deviations of the historical returns with a 98% confidence interval around that amount. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Systematic investing does not ensure a profit or guarantee against a loss in a declining market.
Moderate Growth & Income Portfolio composition is composed of: 2% Bloomberg Barclays US Treasury Bill 1-3 Months, 30% Bloomberg Barclays US Aggregate Bond Index, 6% Bloomberg Barclays US Corporate High Yield Index, 5% JPM EMBI Global Index, 24% S&P 500 Index, 10% Russell Midcap Index, 6% Russell 2000 Index, 8% MSCI EAFE Index, 7% MSCI Emerging Markets Index, 2% Bloomberg Commodity Index U.S.
An index is unmanaged and not available for direct investment. Past performance does not guarantee future results.
Bloomberg U.S. Treasury Bills (1-3M) Index is representative of money markets.
Bloomberg U.S. Aggregate Bond Index is a broad-based measure of the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.
Bloomberg U.S. Corporate High-Yield Bond Index covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB= or below. Included issues must have at least one year until final maturity.
JPM EMBI Global Index is a U.S. dollar-denominated, investible, market cap-weighted index representing a broad universe of emerging market sovereign and quasi-sovereign debt. While products in the asset class have become more diverse, focusing on both local currency and corporate issuance, there is currently no widely accepted aggregate index reflecting the broader opportunity set available, although the asset class is evolving. By using the same index provider as the one used in the developed market bonds asset class, there is consistent categorization of countries among developed international bonds (ex. U.S.) and emerging market bonds.
The S&P 500 index includes 500 leading largest market capitalization companies and covers approximately 80% of U.S. equities market capitalization.
Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000® Index. The Russell 1000® Index measures the performance of the large-cap and mid-cap segments of the US equity universe. It includes approximately 1,000 of the largest securities based on their market cap. The Russell 1000 represents approximately 93% of the US market.
Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
MSCI Emerging Markets Index (MSCI EM) is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets.
MSCI EAFE Index (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI.
Bloomberg Commodity Index is comprised of 23 exchange-traded futures on physical commodities weighted to account for economic significance and market liquidity.