Asset Allocation Comparison Calculator

Enter your initial investment, allocation weights, expected returns, and time horizon to compare how two asset allocations grow and perform against each other.

Created by Luis GonzalezLast updated: June 16, 2026

How to Use This Calculator

1
Enter Investment & Allocations
Input your initial investment, number of years, and for each allocation (A and B) enter the weight percentage and expected annual return.
2
Review Results
See Combined Portfolio Value, Blended Annual Return, and outperformance cards. The Insights panel shows future values for each allocation, weighted simple return, end portfolio shares, allocation coverage, and total gain. The chart and table show year-by-year growth.

Example Calculation

An investor compares a 60/40 split on $50,000 over 10 years — Allocation A (60% weight, 5% return) vs Allocation B (40% weight, 7% return).

Initial Investment ($)

50,000

Number of Years (years)

Allocation A — Weight (%)

Allocation A — Expected Return (%)

Allocation B — Weight (%)

Allocation B — Expected Return (%)

Results

Combined Portfolio Value

$88,209.87

Blended Annual Return

5.84%

Allocation A Outperforms By

$9,523.81

Insights card shows $48,866.

Tips

$50,000 Grows to $88,210 — a 76.4% Total Return Over 10 Years

The 60/40 split at 5%/7% returns produces $38,210 in gains. Allocation A contributes $18,867 (49.4% of gains) despite holding 60% of capital, because its 5% return is lower. Allocation B's 7% return generates $19,343 (50.6%) from just 40% of capital — demonstrating how return rate matters more than allocation size.

Blended Annual Return Is 5.84%, Not the Simple Weighted 5.80%

The weighted simple return (60%×5% + 40%×7% = 5.80%) assumes no compounding. The actual blended CAGR is 5.84% because the higher-returning Allocation B compounds faster, slightly pulling up the portfolio's effective annual growth rate over 10 years.

Allocation A Has $9,524 More in Future Value Despite Lower Returns

A starts with $30,000 (60%) vs B's $20,000 (40%). Even though B earns 7% vs A's 5%, A's larger starting capital produces $48,867 vs $39,343. The $10,000 principal advantage outweighs the 2% return gap over 10 years. At 20 years, B would overtake A due to compounding.

Shifting to 50/50 Would Increase Total Return by ~$1,100

A 50/50 split gives more capital to the higher-returning Allocation B. With $25,000 each: A grows to $40,722 and B to $49,179, totaling $89,901 — about $1,691 more than the 60/40 split. Shifting even more to B (40/60) would produce $91,592, a $3,382 improvement.

Compare Two Asset Allocations Side by Side

The Asset Allocation Comparison Calculator projects how a split portfolio grows over time. A $50,000 investment split 60/40 between two assets returning 5% and 7% grows to $88,210 in 10 years — a 5.84% blended annual return. Allocation A (60% at 5%) ends at $48,867, while Allocation B (40% at 7%) reaches $39,343 — demonstrating that starting capital and return rate create different advantages.

The Compound Growth Formulas

Each allocation grows independently, then combines:

Principal A = Initial Investment × Allocation A Weight / 100
Principal B = Initial Investment × Allocation B Weight / 100
Future Value A = Principal A × (1 + Return A / 100)^Years
Future Value B = Principal B × (1 + Return B / 100)^Years
Combined Portfolio = Future Value A + Future Value B

Additional metrics:

Blended Annual Return (CAGR) = (Combined / Initial)^(1/Years) - 1
Weighted Simple Return = (Weight A × Return A) + (Weight B × Return B)

💡 To measure how efficiently your combined portfolio performs on a risk-adjusted basis with Sharpe ratio and Treynor ratio, try our Asset Management Ratio Calculator.

Example: $50,000 Split 60/40 Over 10 Years

$50,000 initial investment, 60% in Asset A (5% return), 40% in Asset B (7% return), 10-year horizon:

Metric	Value	Context
Combined Portfolio Value	$88,209.87	$38,209.87 total gain
Blended Annual Return	5.84%	Moderate — near market average
Allocation A Outperforms By	$9,523.81	Larger capital base wins over 10 years
Future Value A	$48,866.84	$18,867 gain from $30,000 principal
Future Value B	$39,343.03	$19,343 gain from $20,000 principal
Weighted Simple Return	5.80%	Arithmetic vs 5.84% geometric
End Portfolio Shares	A: 55.4% / B: 44.6%	B's share grows over time
Total Return	76.4%	On $50,000 invested

Despite earning a lower return (5% vs 7%), Allocation A produces a higher future value ($48,867 vs $39,343) because it starts with 50% more capital ($30,000 vs $20,000). However, B generates more gain per dollar invested and its share of the portfolio grows from 40% to 44.6% over the decade.

💡 Once you've chosen your target allocation, use our Asset Allocation Rebalancing Calculator to determine exact dollar amounts to buy and sell for rebalancing.

Why Return Rate and Capital Size Create Different Winners

Allocation A "wins" in absolute future value because its $10,000 capital advantage ($30,000 vs $20,000) outweighs B's 2% return advantage over 10 years. But B wins in efficiency — it turns each dollar into $1.97 vs A's $1.63. Over longer horizons, compounding reverses the outcome: B's 7% return eventually overcomes A's capital head start, making time horizon a critical factor in allocation decisions.

Frequently Asked Questions

How is the blended annual return calculated?

It's the CAGR of the combined portfolio: (Combined FV / Initial Investment)^(1/years) - 1. For $88,210 from $50,000 over 10 years: ($88,210/$50,000)^(1/10) - 1 = 5.84%. This differs from the weighted simple return (5.80%) because compounding favors the higher-returning allocation over time.

What happens if allocations don't add to 100%?

The calculator applies each percentage to the initial investment independently. At 60%+40% = 100%, the full $50,000 is invested. At 50%+30% = 80%, only $40,000 is invested and $10,000 sits idle. At 70%+50% = 120%, you'd need $60,000 but only have $50,000 — the calculator still projects based on the percentages entered.

Why does Allocation A outperform in future value but underperform in returns?

A starts with more capital ($30,000 vs $20,000). Over 10 years, the $10,000 principal advantage produces more absolute value than B's 2% higher return rate. This reverses with longer time horizons — B's compounding advantage eventually overcomes A's starting capital lead.

How does time horizon affect the comparison?

Compounding amplifies return differences over time. At 5 years, the gap between A and B is $5,614. At 10 years, it's $9,524. At 20 years, the higher-returning B actually overtakes A in absolute value despite starting with less capital. The crossover point depends on the return gap and allocation difference.

What's the difference between weighted simple and blended return?

Weighted simple return is arithmetic: (60%×5%) + (40%×7%) = 5.80%. Blended return is geometric (CAGR), accounting for compounding: 5.84%. The difference is small over short periods but grows with time. The blended return is what you actually earn — use it for planning.

Should I always maximize the higher-returning allocation?

Not necessarily. Higher returns usually come with higher risk. A 60/40 stock/bond split accepts lower returns for reduced volatility. If Allocation B (7%) is stocks and A (5%) is bonds, going 100% B maximizes expected return but exposes you to full market risk. The optimal split depends on your risk tolerance, time horizon, and need for liquidity.