Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A portfolio's expected return only reflects reality when the entered weights actually sum to the whole portfolio, since an expected return calculated against weights that don't total 100% is answering a question about a different, incomplete portfolio than the one actually being modeled.
Before you rely on it
What to check
Add up all three entered weights before trusting the result. They should total 100%; anything else means part of the portfolio isn't being represented in the calculation.
The common error
Where people go wrong with portfolio weighted return calculator
Entering asset weights that don't sum to 100%, whether from a rounding habit or forgetting a position. The calculated expected return then describes a portfolio that doesn't match the one actually being modeled.
Sensitivity evidence
How asset a weight changes the weighted portfolio return
| Asset A weight | Weighted portfolio return | Total entered weight | Unallocated or excess weight |
|---|---|---|---|
| 46.0% | 5.6% | 96.0% | 4.0% |
| 48.0% | 5.7% | 98.0% | 2.0% |
| 50.0%worked example | 5.9% | 100.0% | 0.000% |
| 52.0% | 6.1% | 102.0% | -2.0% |
| 54.0% | 6.2% | 104.0% | -4.0% |
Every input, tested
Which input moves the weighted portfolio return most
| Input | Tested from | To | Weighted portfolio return at each end | Swing |
|---|---|---|---|---|
| Asset A return | 6.0% | 10.0% | 4.9% to 6.9% | 2.0% (34%) |
| Asset B return | 4.0% | 6.0% | 5.6% to 6.2% | 0.600% (10%) |
| Asset C return | 1.0% | 3.0% | 5.7% to 6.1% | 0.400% (6.8%) |
| Asset A weight | 48.0% | 52.0% | 5.7% to 6.1% | 0.320% (5.4%) |
| Asset B weight | 28.0% | 32.0% | 5.8% to 6.0% | 0.200% (3.4%) |
| Asset C weight | 18.0% | 22.0% | 5.9% to 5.9% | 0.080% (1.4%) |
Two variables at once
Weighted portfolio return by asset a weight and asset a return
| Asset A weight \ Asset A return | 4.0% | 8.0% | 12.0% |
|---|---|---|---|
| 46.0% | 3.7% | 5.6% | 7.4% |
| 48.0% | 3.8% | 5.7% | 7.7% |
| 50.0% | 3.9% | 5.9% | 7.9% |
| 52.0% | 4.0% | 6.1% | 8.1% |
| 54.0% | 4.1% | 6.2% | 8.4% |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Asset A weight | 50.0% |
| Asset A return | 8.0% |
| Asset B weight | 30.0% |
| Asset B return | 5.0% |
| Asset C weight | 20.0% |
| Asset C return | 2.0% |
| Weighted portfolio return | 5.9% |
| Total entered weight | 100.0% |
| Unallocated or excess weight | 0.000% |
Where the inputs come from
Enter each asset's weight as a percentage of the portfolio and the expected or historical return for that asset. Weights should add to 100, and the tool reports any unallocated or excess weight. Use consistent return assumptions across assets, such as long-run expected returns after fees. Historical returns from a fund page are the usual starting point.
Using the weighted portfolio return in a real decision
Higher expected return always comes with higher risk.
When the result stops applying
It is a weighted average of assumptions, and the assumptions are the weak point: expected returns are uncertain and differ widely between sources. The result ignores rebalancing, taxes and fees at the portfolio level, and assumes weights stay fixed. Realized return will differ as weights drift.
What to compare it with
The two-asset portfolio risk calculator shows the volatility side, and the asset allocation drift page shows how weights change over time. For a goal, the future value calculator turns the expected return into an ending balance. Compare the mix against a simple target-date fund.
People also ask
Frequently asked questions
How do I choose expected returns?
Use long-run estimates for each asset class from a credible source, or historical averages, and prefer a range of lower and higher cases over a single figure.
What if my weights do not add to 100%?
The tool reports the unallocated or excess weight. Adjust the inputs until they total 100 so the result describes the whole portfolio.
Does a higher weighted return mean a better portfolio?
Not by itself. Higher expected return usually requires more risk, so compare the return with the volatility and your ability to hold through losses.