calculate the returns of the equal weighted portfolio Calculator
Use this single-column calculator to calculate the returns of the equal weighted portfolio, see equal weight growth trajectories, and copy detailed results for reporting.
Equal Weighted Portfolio Return Calculator
Defines how many asset return inputs are used. Equal weights = 1 / number of assets.
Duration of compounding for the equal weighted portfolio.
Total amount split equally across all assets.
If provided, the contribution is divided equally across assets each year.
Projected equal weighted portfolio value: 0
Equal weight per asset:0
Average annual return:0
Total contributions:0
Annualized portfolio growth rate:0
Formula: Average of asset returns × equal weight, compounded over years with contributions distributed evenly.
Year
Portfolio Value
Average Asset Value
Total Contributions To Date
Table: Year-by-year projection for the equal weighted portfolio using the specified average annual return and contributions.
Portfolio Value
Average Asset Value
Chart: Dynamic projection comparing equal weighted portfolio value vs. average asset value over the holding period.
What is calculate the returns of the equal weighted portfolio?
calculate the returns of the equal weighted portfolio is the process of averaging individual asset returns and applying equal weight to each position so every holding has identical capital allocation. Investors who want diversification without active weighting should calculate the returns of the equal weighted portfolio to see balanced growth. A common misconception is that calculate the returns of the equal weighted portfolio removes risk entirely; it simply spreads risk evenly rather than eliminating it.
calculate the returns of the equal weighted portfolio Formula and Mathematical Explanation
To calculate the returns of the equal weighted portfolio, assign each asset a weight of 1 ÷ N where N is the total number of assets. Multiply each asset's expected return by the equal weight, sum those products to get the portfolio expected return, and then compound that return over the holding period. When contributions are made, divide contributions equally each year before compounding the next period.
Step-by-step to calculate the returns of the equal weighted portfolio:
Determine N assets; equal weight w = 1/N.
Compute expected portfolio return r = Σ(return_i × w).
Divide contributions equally across assets to keep weights aligned.
Variable
Meaning
Unit
Typical range
N
Number of assets in the equal weight mix
count
2 to 50
w
Equal weight per asset (1/N)
decimal
0.02 to 0.5
r_i
Individual asset expected return
decimal
-0.20 to 0.30
r
Average portfolio return
decimal
-0.05 to 0.20
C
Annual contribution (split equally)
currency-free units
0 to 1000000
V_y
Portfolio value at year y
currency-free units
depends on inputs
Table: Variables used to calculate the returns of the equal weighted portfolio.
Practical Examples (Real-World Use Cases)
Example 1: An investor wants to calculate the returns of the equal weighted portfolio with 4 stocks returning 6%, 8%, 10%, and 4% over 10 years, starting with 15,000 and no contributions. Equal weight per stock is 25%, average return is 7%, and the portfolio compounds to approximately 29,508, showing how equal allocation smooths performance relative to any single name.
Example 2: A saver wants to calculate the returns of the equal weighted portfolio across 5 ETFs returning 5%, 6%, 7%, 6%, and 5%, holding for 7 years with 2,000 annual contributions. Equal weight is 20%, average return is 5.8%, and the ending value is roughly 31,941. This demonstrates how steady contributions and equal weight reduce the impact of one ETF underperforming.
How to Use This calculate the returns of the equal weighted portfolio Calculator
To calculate the returns of the equal weighted portfolio, set the number of assets, enter each expected annual return, define your holding period, initial investment, and optional annual contribution. Results update instantly with the primary equal weighted portfolio value, intermediate weight per asset, average annual return, total contributions, and annualized growth rate. Read the projection table and chart to see how equal weighting affects compounding year by year.
Key Factors That Affect calculate the returns of the equal weighted portfolio Results
Six critical drivers shape calculate the returns of the equal weighted portfolio outcomes: the dispersion of individual asset returns, the number of holdings that control equal weight size, the reinvestment period length, the stability of annual contributions, the impact of volatility drag on compounding, and the rebalancing frequency that keeps weights equal. Taxes, fees, inflation, and cash drag can also shift how you calculate the returns of the equal weighted portfolio in real markets.
Frequently Asked Questions (FAQ)
Does calculate the returns of the equal weighted portfolio reduce risk? It diversifies evenly but does not remove market risk.
What happens if one asset has a negative return? calculate the returns of the equal weighted portfolio averages the loss with other positive returns, cushioning the impact.
How often should I rebalance? Regular rebalancing maintains the equal weight used to calculate the returns of the equal weighted portfolio.
Can I include bonds and stocks together? Yes, calculate the returns of the equal weighted portfolio across mixed assets by assigning equal weights.
Is equal weighting better than market-cap weighting? It depends on your risk and factor preferences when you calculate the returns of the equal weighted portfolio.
Do contributions stay equal? Contributions are split evenly each year to preserve the equal weights when you calculate the returns of the equal weighted portfolio.
What if my asset count changes? Recalculate weights as 1/N to keep the correct equal weighting.
Can volatility affect the outcome? Yes, volatility drag influences compounded results even when you calculate the returns of the equal weighted portfolio.
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text+="\nAssumption: calculate the returns of the equal weighted portfolio uses equal weights and compounds annually with even contributions.";
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