AllocationMaster™: About

Scenario Assumptions
Scenario Assumptions are the underlying estimates used in asset allocation analysis to develop efficient portfolios. These portfolios provide the best trade-off of investment risk and return. For each of the major Asset Classes included in AllocationMaster™, specific performance estimates are made and then updated each quarter.

Asset Classes
Asset allocation analysis is performed using asset classes. Each asset class represents a broad investment category. In order to differentiate between the asset classes used in the program, each of the investment categories is selected to be as unique and non-overlapping with the other asset classes as is possible. Your program will be provided with a default list encompassing the major asset classes.
Custom Editions: The asset classes may have been customized and are not shown on the demonstration disk. The asset classes cannot be modified by the user.

Risk/Return Estimates
Estimates of future performance are provided for every asset class used in AllocationMaster™. The default model assumptions are reviewed and any adjustments are made quarterly.

Expected Return. The long-term average total return for each asset class is developed using capital asset pricing theory.
Risk (Standard Deviation). An estimate of the possible return volatility of each asset class.
Correlation. The relationship of return behavior between every pair of asset classes. How return patterns are related between asset classes determines the diversification benefit of combining them into a portfolio.
Yield. The cash income (dividends, coupons, etc.) produced by each asset class.
Turnover. The average annual rate at which capital gains are realized.

Custom Editions: The asset classes and investment assumptions may be different than shown. They may be proprietary and developed by an internal investment research group.

Historical Returns Database
Access up to 40 years of performance histories for over 100 market indexes and mutual fund averages. Data covers all sectors of the capital markets extending back to 1960 or the inception date. This information is used to represent the performance of the asset classes used in AllocationMaster™. The data can be accessed to prepare historical plots which compare the performance of different investments. It can also be used to backtest alternative portfolios. Custom Editions: The database may also include other market index, money manager, mutual fund or performance benchmarks.