Portfolio simulator, frequently asked questions

Disclaimer

IMPORTANT: The calculations and any other information generated by this tool are provided by Silicon Cloud Technologies, LLC based on the back-testing functionality of their Portfolio Visualizer software. Note that the resulting performance of various investment outcomes are hypothetical in nature, may not reflect actual investment results and are not guarantees of future results. World Gold Council and its affiliates and subsidiaries provide no warranty or guarantee regarding the functionality of the tool including without limitation any projections, estimates or calculations.
All content on this page is directly sourced from Portfolio Visualizer where more information can be found.

About Portfolio Visualizer and Silicon Cloud Technologies, LLC

The backtesting tool is provided by Silicon Cloud Technologies, LLC, an Austin, TX based financial technology company founded in 2013. The company provides the online software platform Portfolio Visualizer. The platform is focusing on quantitative, factor based investing tools. Silicon Cloud Technologies, LLC specializes in software solutions for investment research and analysis, portfolio management and financial planning with the goal to empower investors and investment managers with better quantitative investment analysis tools. More information on Portfolio Visualizer can be found here: https://www.portfoliovisualizer.com

Saving and retrieving portfolios

When you are signed in with your registered account you will see a “Save” button towards the top right. By pressing it, you can save your entered portfolio(s) under a ”Simulation name”, which you specify. You can then later load, duplicate or delete simulations by clicking on “My simulations” to the right of the “Save” button. After analysing a portfolio, you can also share a link to the simulation by pressing the button “Get link” and forwarding the URL, e.g., by email. In addition you can download simulations in csv-format or print the results of the analysis.;

Asset Class Allocation Backtesting

The asset allocation backtesting tool uses asset class return data to backtest simulated portfolio returns. The asset allocation backtesting tool calculates portfolio returns (end balance, CAGR, IRR), risk characteristics (standard deviation, Sharpe ratio, Sortino ratio, maximum drawdown), and rolling returns based on monthly data. The risk free rate is based on historical 1-month treasury bill return data from Professor Kenneth French's data library. Inflation adjusted returns, withdrawals and contributions are based on the CPI-U data from the Bureau of Labor and Statistics. Internal rate of return (IRR) is shown for portfolios with periodic withdrawals or contributions. By default the simulated portfolio is rebalanced annually. Asset allocation drift data is displayed under the results section if rebalancing is disabled. Besides annual rebalancing the rebalancing period can also be set to monthly, quarterly, or semi-annual. Rebalancing bands are also supported, and the default rebalancing bands are based on 5% absolute deviation from the target allocation (large allocations), or 25% relative deviation from the target allocation (small allocations). If the target allocation for an asset is 60%, then the absolute deviation threshold would trigger rebalancing when the asset's weight in the portfolio hits 65% or 55%. If the target allocation for an asset is 10%, then the relative deviation threshold would trigger rebalancing when the asset's weight in the portfolio hits 12.5% or 7.5%.

Data Sources for Asset Class Returns

The data sources for monthly asset class returns are listed below. The table of annual asset class returns shows the calculated annual returns based on the data sources below.

Gold
LBMA Gold Price PM USD 1971+
Cash
Bloomberg Barclays Short Treasury Total Return Index Value Unhedged USD 1989+
Total US bond market
Bloomberg Barclays US Agg Total Return Value Unhedged USD 1976+
US treasuries
Bloomberg Barclays US Treasury Total Return Unhedged USD 1973+
US credit bonds
Bloomberg Barclays US Credit Total Return Value Unhedged USD 1973+
US corporate bonds
Bloomberg Barclays US Corporate Total Return Value Unhedged USD 1973+
Global bonds ex US (unhedged)
Bloomberg Barclays Global Treasury x US Total Return Index Value Unhedged USD 1987+
US stocks
MSCI USA Net Total Return USD Index 1971+
Developed markets stocks ex US
MSCI EAFE Net Total Return USD Index 1971+
Emerging market stocks
MSCI Emerging Net Total Return USD Index 1998+
REITS
FTSE Nareit Equity REITs Total Return Index USD 1971+
Commodities
Bloomberg Commodity Index Total Return 1971+
Inflation (CPI-U)
Bureau of Labor and Statistics Consumer Price Index (CPI-U) 1972+

Asset class level returns are typically updated on 10th or 11th date of the following month since this date corresponds to when inflation data for the previous month becomes available. 

Data Accuracy

Historical data for annual asset class returns is not 100% reliable and authoritative sources often differ on exact returns for a particular investment. Typical differences for historical asset class returns based on the data source are below 50 basis points.