FAQ, Performance Insight - How does the performance slider work? I'd like to understand what it means by sliding down to 0.5% or to a 1% lower return.


How does the performance slider work? I'd like to understand what it means by sliding down to 0.5% or to a 1% lower return.



For accounts grown using a fixed growth rate, the Performance slider can be used to adjust capital growth upwards or downwards in .5% increments from their starting position. For example, if you have an account that is set to grow at a growth rate of 2% (net of any account fees) and you move the performance slider up a notch from midpoint, the growth rate would be 2.5%. Move the slider a notch down from midpoint and the growth rate would be 1.5%.

This assumes the Growth settings for the investment or savings account does not have the Growth is Fixed option ticked. When ticked, the account growth rate will not be altered by the Performance slider. Cash accounts (accounts entered on the Savings screen) are defaulted to have the Growth is Fixed option ticked, effectively omitting them from this simulation, at least by default.

Accounts that are set to be grown using asset allocation, are handled differently. When you view the Growth (or Growth & Yield) panel for an Investment, Money Purchase or Drawdown Pension, you will see the option to Use Asset Allocation. A similar option is on the Growth panel of the Savings screen, only it is the "Use 100% Cash Allocation".

When this option is ticked, rather than using a fixed growth rate, the account's growth will be derived from market assumptions the account's asset allocation or, in the case of cash accounts, the market assumptions for a 100% cash allocation.

To view what these growth assumptions are for an investment, money purchase or unsecured pension, expand the Asset Allocation panel. This panel will show an Average (50th percentile), and Upside and Downside returns, which are derived from the asset allocation chosen and the market assumptions for these asset classes. The Average 50th percentile growth rate is assumed initially for accounts set to be grown using asset allocations. The Upside and Downside are each two standard deviations from the 50th percentile mean, the Average return. The upside is the 95th percentile, the uppermost possible return based on the market assumptions and the asset allocation chosen; the downside is 5th percentile, the bottom-most return for the asset allocation. 

When you move the slider upwards or downwards, the growth rate for the account will move closer to the Upside or Downside return rate, depending on the direction you move the slider.

You can view the adjusted return rates while using the Performance slider by clicking any bar of the Let's See chart. The chart legend will appear. Click the Detailed Info link at the bottom of the legend. The chart details panel will display. Click the Investments or Pensions tab. These tabs will show the adjusted growth rates for savings and investments (the Investments tab) and for unsecured pensions and money purchases (the Pensions tab). The growth rates shown will be net of any fees set for the given account.

Also note that the Performance slider only adjusts capital growth. Natural income, Dividend and Interest Yield, are not adjusted by the slider.