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Is an 18.1% annual return on the UC DCP not incredibly high, i.e. outside reasonable historical bounds?
What are the underlying investments? Any chance that a UC alum can get in on this deal? For 18.1% annual return, I’d be real hesitant to think that that could possibly be true—unless the taxpayers of California are being fleeced, but I don’t think that’d ever happen.
Consider the following: for calendar year 2017,
the Russell 3000 index (broad US market) return was 21.13%.
the MSCI AWCI ex-US (all-world ex-US) return was 27.04%.
the Bloomberg Barclays US Aggregate bond index (US total bond market, more or less) returned 3.54%.
So a stock sleeve of 2/3 US + 1/3 ex-US indices should have returned approximately 23.1%
And a fund/portfolio composed of this same stock index sleeve at 75% and US bond index at 25% should have returned something like 18.2% for year 2017. [The simple arithmetic approach neglects small effects due to rebalancing inside the fund arising from the three indices advancing at different rates at different times of the year.]
So I would say: plainly inside historical bounds for a one-year return...but at the same time, very high relative to long term average annual return for such a portfolio, both historically and expected from the future. Suggests the relative insignificance of single year return for a decades-long haul.
Last edited by ofckrupke on Tue Oct 16, 2018 12:55 pm, edited 1 time in total.
That is the correct answer as it is the same as every post on the thread of "What are returns YTD". A simple equation of returns is basically: Asset allocation +/- alpha- fees- taxes. That simple or not simple as it may be to figure out.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle