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Investment scenario comparison

Define two or three investment strategies — your own returns, fees, dividends, and contributions — and see how they diverge over your horizon. No fund names, just the maths.

Calculator compare

Logic updated April 2026

This calculator compares multiple investment strategies side by side over a multi-year horizon. Each scenario has its own annual return, fees, dividend yield, monthly contribution, and reinvestment policy. The output shows a year-end balance schedule for each scenario, total contributions, dividends earned, and the dollar gap between the best and worst final values.

How this is calculated

Formula 

Each year per scenario: balance × (1 + (return − fees)/100) ; dividends = dividendYield × balance ; if reinvested, balance += dividends ; balance += monthlyContribution × 12

Step-by-step

  1. For each scenario, apply net price growth (annual return − annual fees) to the balance at end of year
  2. Track fees deducted as (annual fees × balance)
  3. Add monthly contributions × 12 to the balance
  4. Calculate dividends as (dividend yield × balance) at the end of each year
  5. If dividends are reinvested, add them to balance and they compound from next year; if not, track them separately
  6. Year-end balance schedule lets the user see how scenarios diverge over time
  7. Output the gap between best and worst scenarios at end of horizon
Rounding mode
ROUND_HALF_UP
Precision
20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
Logic last reviewed

Assumptions & limitations

What this calculator assumes

  • Returns, fees, dividend yield, and contribution amounts are held constant for the horizon
  • Net annual price growth = annual return − annual fees, applied at the end of each year
  • Monthly contributions accrue end-of-month and are added to the balance before next year's growth
  • Dividends are credited annually as a percentage of the current balance
  • When dividends are reinvested, they're added to the balance and compound from the next year
  • When dividends are not reinvested, they're tracked separately and not invested
  • No taxes on dividends or capital gains are modelled
  • No transaction costs or bid-ask spreads

What this calculator doesn’t account for

  • Doesn't model varying returns or fees over the horizon
  • Doesn't include tax on contributions, dividends, or capital gains
  • Doesn't factor in transaction costs or rebalancing
  • Doesn't model sequence-of-returns risk if drawing from the balance
  • Doesn't account for currency risk on cross-border scenarios

Worked example

Compare three scenarios over 20 years, each with $50,000 initial: A) high-fee active fund (8% return, 1.5% fees, 2% yield, reinvested, $500/month), B) low-cost index ETF (8% return, 0.2% fees, 2% yield, reinvested, $500/month), C) bonds (4% return, 0.3% fees, 4% yield, taken as cash, $500/month).

Input Value
Initial / horizon / monthly $50,000 / 20 years / $500
Scenario A (active) 8% / 1.5% fees / 2% reinvested
Scenario B (index) 8% / 0.2% fees / 2% reinvested
Scenario C (bonds) 4% / 0.3% fees / 4% cash

A: ~$420k — B: ~$526k — C: ~$235k + ~$190k cash dividends — Best beats worst by ~$291k

Scenario A's high fees compound into a 20% drag on final value vs Scenario B at the same gross return — that's $106k of fees over 20 years on a portfolio that ends ~$526k. Scenario C produces lower total wealth but generates substantial cash income for a retiree's lifestyle. The right scenario depends on goals: B for accumulation, C for income, A is hard to justify against B unless the manager is reliably beating the index by more than 1.3% per year.

Frequently asked questions

How do I compare investment scenarios?

Hold the basic inputs (initial amount, horizon, contribution) constant and vary the strategy variables (return, fees, yield, reinvestment). The calculator simulates each scenario year-by-year and shows where they diverge. Common comparisons: active vs passive, high-fee vs low-fee, growth vs income, with vs without contributions. The dollar gap at end of horizon makes the trade-offs concrete.

What variables should I change between scenarios?

The ones you're actually choosing between. If you're deciding between two funds, vary returns and fees. If you're choosing between income and growth strategies, vary dividend yield and reinvestment. Don't vary inputs you have no control over — keep horizon and contribution constant unless they're genuinely the variable you're testing.

How does risk affect scenario comparison?

This calculator models nominal returns only — it doesn't capture volatility or risk of loss. A scenario showing 12% annual return looks great on paper but may be unattainable in practice without sustained risk that produces drawdowns of 30–50% in some years. Pair this calculator with a Monte Carlo or volatility-aware tool when risk matters; use it primarily for scenarios that share similar risk profiles.

What is a hurdle rate?

The minimum return needed to justify an investment. Common hurdle rates: cost of capital (what your alternatives return), inflation rate plus a real-return target, or a benchmark index. Comparing scenarios against a hurdle rate frames whether each scenario is worth pursuing at all — a 3% return scenario fails a 6% hurdle even if it's positive in absolute terms.

Should dividends be reinvested?

Mathematically yes for accumulation — reinvesting compounds returns and is almost always the higher-final-balance choice. Practically it depends on goals: retirees often take dividends as cash for living expenses; accumulators reinvest. The calculator handles either, and the dollar difference between the two paths is striking over 20+ year horizons — typically 20–40% higher final balance with reinvestment.

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