Financial Planning Assumptions (Factor-Tilted Portfolio)

This guide is intended to provide Canadian financial planners with our best estimates of future asset class returns and volatilities to produce financial projections for their clients. This document assumes that investors hold a broadly diversified portfolio of publicly traded Canadian fixed-income securities and global equity, including developed and emerging markets. These estimates are valid uniquely in the context of an investor who purposely avoids concentration in one or a few securities or sectors. Our investment horizon is 30 years. Key inputs are highlighted in grey for the NaviPlan financial planning software users. We have added an appendix to provide users of NaviPlan with data presented in a more user-friendly format.

We have created this report specifically to help financial advisors who invest with mutual funds from Dimensional Fund Advisors Canada. The asset class expected returns, standard deviations, correlations, and distribution yields are designed to replicate the characteristics of the DFA Global Allocation funds. Importantly, these characteristics account for the exposure of these funds to the Fama-French factors.