The return rate is driven by the component asset classes in the selected portfolios. For example, a 60/40 US Stock/Bond Default Portfolio will have a 5% capital gain return and a 2% qualified dividend return on the equity portion (60% of the portfolio), and a -.5% capital return and 5.4% ordinary income return on the bond side (40% of the portfolio).
The blended return, therefore, would be as follows:
Asset Class |
% Portfolio |
Asset Return |
Return |
|
Equity (SPY) |
.6 |
.07 |
.042 |
|
Bond (VBMFX) |
.4 |
.049 |
.0196 |
|
Blended Total Return |
|
|
.0616 |
|
The relevant return for any other portfolio could be calculated in similar fashion.
Note that for Non-Qualified Accounts, assumptions and adjustments should be made due to the tax implications.