Wealthsimple Portfolios Graph Disclosure
Within Wealthsimple Portfolio investing accounts there are graphs that display hypothetical historical and future projections of performance based on the portfolio template you select. Wealthsimple Portfolios are self-directed accounts, you can pick a portfolio to start and customize the holdings and allocations to suit your own preferences. Each portfolio template starts with preset allocations to different asset classes, industry sectors and/or countries (asset allocations) and uses Exchange-Traded Funds (ETFs) to facilitate exposure to the asset allocation. ETFs are investment vehicles that seek to replicate, to the greatest extent possible, the performance of specific indices, including but not limited to equities, bonds and other financial instruments, geographies, industry sectors and other criteria. You can review ETF fact sheets for detailed information regarding an ETF’s portfolio allocation, investment strategy, risks, fees, and other information.
The graphs are shown for illustrative purposes only and do not represent the actual returns of an account. The graphs shown assume you do not make any changes to the portfolio template (asset allocations or the default ETF for each allocation).
The historical returns are simulated based on a monthly rebalancing simulation of the portfolio template, assuming an initial deposit and an amount contributed to the account each month. The returns illustrated include the management expense ratio (MER) for the default ETFs but do not take into account taxes payable by clients, Wealthsimple’s portfolio automation fee, or other costs that would have further reduced returns. The simulated returns have been calculated using the default ETFs wherever possible. In cases where the default ETF did not exist as of the simulation start date, an alternate ETF with a similar investment strategy and features was used as a substitute for the asset allocation. While every effort has been made to ensure that the substitute ETF closely aligns with the asset allocation, variations in performance, holdings, fees and risk characteristics may exist. Past performance is not indicative of future results and future performance may materially differ from expectations.
The forward-looking projected returns are simulated based on a projected cash rate of 3.5%, plus excess returns ranging from 2.8% to 4.7%, after deducting a portfolio automation fee of 0.50% and assuming average ETF MER of 0.15%. The specific excess return depends on the risk level of your account. The hypothetical projections in this graph are based on an initial deposit, an amount contributed to the account each month, and the assumed rate of return based on the portfolio template.
The “likely” section of the graph represents a 50% confidence interval, while the “less likely” section represents a 90% confidence interval. These projections are based on forward-looking Sharpe ratios, asset class volatility, and historical long-term correlations for each portfolio template. They do not take into account sales, redemptions, transfers, optional charges, or income tax payable by clients, which would reduce the returns.
Please note that all the information provided is hypothetical and for illustrative purposes only. It is not intended as investment advice or constitute a recommendation. Simulated performance does not necessarily indicate future results, and actual allocations and performance may differ. All investments involve risk.