You
The numbers below are examples, so the charts work straight away – replace them with your own.
All results include costs – set them under ‘More options’.
Contributions count here: the chart shows the blended yearly rate the lump sum and the deposits earned (the rate leans on the years when most of the money was invested, so adding money can lower the rate while raising the final amount).
The detail view compares super and pension directly – contributions and account type don't apply.
Inflation display options
Your mix
70% growth – what Australian funds usually call 'Balanced' and international ones call 'Growth'.
Many super funds' 'Balanced' option holds at least 70% – and up to 80% or even 90%+ – growth assets. The name and the number are different things.
Three portfolios
Defaults make the classic comparison: all-defensive vs the common 'Balanced' 70% vs all shares.
The panic scenario
Standard growth mix: 45% Australian / 55% international shares, bonds defensive. Falls checked monthly.
Starting years
The detail view follows one starting year, year by year: the same money as super accumulation, and as a pension whose payments are either spent or reinvested outside super. Contributions are set to zero in all three lines so they are like for like.
More options
Investment Variables
The focus mix is normally used by a financial adviser to show how much the returns differ when the starting year changes.
Costs
Fund costs default to the Management Expense Ratio (costs, MER) of an average of the three biggest ETF (fund) providers on the ASX – Vanguard, Betashares, iShares – per asset class. All assumptions.
Why look at this?
This is a resource for Australian investors to get an impression of how future investment returns end up if they resemble the past. It shows the wide variety of outcomes past investors have had – and separates what investors could influence from what they could not.
You can influence: your mix of growth and defensive assets, how much you contribute, whether you invest inside super or outside it, what you pay in fees, and – above all – whether you sell after a big fall.
You cannot influence: which decade you happen to invest in. The same choices, started in different years, ended very differently – and nobody can know in advance whether their starting year is a difficult year, such as 1988 turned out to be, or a good year, such as 1975, when everything in the news at the time was gloom and doom.
What makes this Portfolio Lab different: portfolio-history tools are usually American, and usually show returns before tax. The Lab is built on Australian financial-year data and applies Australian tax rules to every figure – 15% inside super accumulation, 0% in pension (with the compulsory minimum withdrawals), your marginal rate outside super – including franking credits on Australian shares from their introduction in 1988. Everything is after fees and inflation as well. The assumptions page lists every rule.
Each numbered view above makes one of these points with 56 years of Australian data, after fees, tax and inflation. Start with 1 · How time changes risk; everything is adjustable, and every figure updates as you move the controls.
Why not look at this?
This is an enjoyable and useful tool if you want to see what influences investment returns and by how much.
If you are an Australian tax resident and want to know what affects investment returns but this resource seems too much, you could ask a friend to show you how it works or you could just play with it, change numbers, tick and untick boxes, see what happens and over time it will make more and more sense.
Three account types, three sets of tax rules
Super – accumulation. Investment income is taxed at 15% inside the fund, and fees paid from the account attract a 15% tax credit. Contributions are treated as gross tax deductible contributions, whether from employer or personal – so 15% contributions tax comes out on the way in (30% for high earners – see the Div 293 option in the You panel). Concessional contributions are also capped each year at the indexed concessional cap ($32,500).
Pension. Investment income is untaxed and franking credits are refunded in full. The law requires minimum withdrawals each year, which the Lab pays out to you and counts in your outcome.
Outside super. Investment income is taxed at your marginal rate (the Lab's options include the Medicare levy), and franking credits offset that tax.
Franking credits
Large Australian companies pay tax at 30% before they pay dividends, and pass the credit for that tax on to you. For the Australian share index, about 77% of distributions carry franking; the Lab grosses these up and credits them against each year's tax, the same way your tax return would. The credits begin in FY1988, when dividend imputation began – earlier years have none.
Capital gains tax
Who pays capital gains tax in a fund? It depends on the wrapper, i.e. whether it is an Exchange Traded Fund (ETF), which is a fund that can be bought and sold on a stock exchange such as the ASX or a managed fund, which needs to be bought and sold in other ways.
In a managed fund, when other investors cash out, the fund sells assets to pay them – and the capital gains realised by that selling are distributed to the investors who stay. Long-term holders can receive tax bills triggered by other people's exits. The investor who leaves pays tax only on the difference between their own buying and selling prices, plus their share of any gains the fund distributed along the way from rebalancing.
In an Exchange Traded Fund, market makers (the people who are responsible for making the ETF work as an ETF) buy back ETF units by taking shares out of the ETF fund and handing those actual shares to the seller of the ETF units – nothing is sold inside the fund, and the fund hands over its lowest-cost-base parcels.
Remaining investors are not handed anyone else's tax bill, and the big index ETFs – such as VAS (Australian Shares ETF), VGS (Global Shares ETF), and the US-domiciled VTS (US Total Market) – have distributed virtually no capital gains as a result. Tax is deferred until you sell, at your marginal rate at that time – which may be far lower in retirement.
The cautionary tale is Vanguard's US Target Retirement funds in December 2021, which was a managed fund, not an ETF: institutional investors stampeded to a cheaper version, the funds sold holdings to pay them out, and the loyal investors who stayed received taxable capital-gain distributions of roughly 8–12% of their entire balance in one year. Australian ETFs are not immune either – in FY2021 several currency-hedged ETFs paid out large one-off taxable hedging gains. The unhedged index funds the Lab models sailed through the same year quietly.
Inside super the question fades further: a portfolio can be held, without selling, until pension phase, where realised gains are taxed at zero.
The Lab therefore shows returns without CGT along the way. Outside super, CGT does arise when you sell – and selling in a panic would trigger it too if there had been an overall gain. The Lab now shows this: choose Outside super on the left and the outcomes appear after CGT, under both the current rules and the proposed 2027 rules.
Trusts and companies
Under the proposed 2027 rules, capital gains carry a minimum 30% tax rate. If the investment is owned by a family trust that distributes to a company who then eventually distributes it to an individual,
- the 30% capital gains tax minimum paid by the trust, and
- the company's 25% tax rate on the amount received, and
- the individual tax rate,
compound:
A capital gain after inflation in a trust of $1,000 pays 30% or $300 in tax. Leaving $700.
If those $700 are distributed to an individual, that individual gets a tax credit of $300 and therefore pays either 30% (if their tax rate is 0% or 19%) or the marginal tax rates of 32%, 39% and 47% and therefore ends up with $700, $680, $610 or $530.
If those $700 are distributed to a company as it may own the trust (a common arrangement), the company pays 25% (sometimes 30%) tax on the $700 and receives no credit for the tax already paid, leaving $525.
If that gain then finds its way to an individual as company dividends, the individual receives $525 as cash and $175 as franking credits and pays tax as outlined above, with one exception: If their tax rate is under 25%, then the Australian Taxation Office refunds them up to $175.
If their tax rate is 32%, they end up with $476 and paid 52.4% tax.
If their tax rate is 39%, they end up with $427 and paid 57.3% tax.
If their tax rate is 47%, they end up with $371 and paid 62.9% tax.
Happy days.
Every rate, threshold and data source is listed on the assumptions page.
Recommended – explore inflation effects in the left sidebar.
Show in after-inflation, real dollars: no inflation selected – the two displays are identical.
View these numbers as a table
And what does this mean?
Why two “medians” can disagree
Once contributions are switched on, the historical stretches can be put in two different orders: by the yearly rate they earned, and by the dollars they finished with. The two orders are not the same list, so the middle stretch of one is not the middle stretch of the other. In one standard run the middle-rate stretch finished at $915,365 while the middle of the finishing dollars was $1,336,293 – both are true, and they describe different stretches of history.
It is the difference between the median-height person and the median-weight person: two real people, rarely the same one. Every tile and label on this site therefore shows the median of the measure it is displaying – a median rate is the middle rate, a median balance is the middle balance.