What Return Should I Assume for XEQT?

If you have ever opened the XEQT calculator and stared at the “annual return” box wondering what number to type in, you are not alone. It is the single most common question behind every projection — and the number you pick changes the answer by tens of thousands of dollars.

Here is the short version: assume 7% a year before inflation, or about 5% after inflation. If you want to be cautious, use 5% before inflation instead. Do not use 11% or 12%, even though that is roughly what XEQT has averaged since it launched. I will explain why below.

What XEQT Has Actually Returned

XEQT launched in August 2019. Here is what it has done each full year since, from our year-by-year performance history:

Add it all up and XEQT has averaged roughly 11–12% a year since inception, turning $10,000 at launch into about $20,000 by the end of 2025. That is a great result — and exactly why you should not plan on it repeating.

Those six and a half years included a pandemic crash and recovery, an AI-driven bull market, and two blockbuster years in a row. Over 100+ years, global stock markets have returned roughly 8–10% a year before inflation. Most financial planners use 7–8% when planning for a 100% equity portfolio, precisely because it builds in a margin for the decades that come in below average.

7% sits in the middle of that range: optimistic enough to be realistic, conservative enough that you are not planning your retirement on a bull market repeating itself forever.

Nominal vs. Real: The Number That Actually Matters

7% is the nominal return — the number on your statement before inflation. What your money can actually buy grows more slowly, because prices rise about 2% a year.

• 7% nominal ≈ 5% real (after ~2% inflation)
• 5% nominal ≈ 3% real

That distinction matters more than it looks. $500 a month for 20 years at 7% grows to about $260,000 — but in today’s dollars, that is worth roughly $175,000. Same portfolio, same return, very different purchasing power. When you run your own numbers, decide whether you are looking at nominal or real dollars, and be honest with yourself about which one you used.

What the Difference Looks Like

Same plan — $500 a month for 20 years, $120,000 contributed in total — at three different assumptions:

The gap between the cautious case and the optimistic case is almost $130,000, and the only thing that changed is one number in a box. That is why the assumption matters more than the calculator. Run your plan at 7%, then run it again at 5% — if the plan still works at 5%, it is a good plan.

These figures are illustrations, not predictions. They assume the same return every single year, which never happens in real life.

The Catch: XEQT Has Never Returned “the Average”

Look at the table above again. XEQT has never actually returned 7% or 11% in a year. It returned +21%, then -11%, then +18%, then +25%, then +10%. The average is a smooth line drawn through a very bumpy ride.

That lumpiness is the price of the return. If you need the money within five years, none of these assumptions apply — that money should not be in XEQT at all. And if you check your portfolio daily, the bumps will feel enormous. The assumption only works if you stay invested through the down years, because the up years that follow are where the average comes from.

How to Use This Number

1. Open the XEQT calculator and enter 7% as your annual return.
2. Run the same projection again at 5% as a stress test.
3. If your goal still works at 5%, you have a plan with room to breathe. If it only works at 9% or higher, the plan needs more contributions, more time, or a smaller goal — not a rosier assumption.

Important disclaimer: The figures on this page are approximate, based on XEQT’s published history and long-run global equity returns, and are intended for educational purposes only. Your actual returns will differ depending on when you buy, whether you reinvest distributions, and what markets do. Past performance does not guarantee future results.

Related Reading

• XEQT Compound Interest Calculator
• XEQT Returns by Year: Complete Performance History Since Inception
• XEQT Simulator: What Monthly Investing Since 2019 Built
• How Long Does It Take to Reach $100K with XEQT?
• XEQT vs VFV Calculator: Project Growth and Compare Fees

Some articles were generated using artificial intelligence. While we strive for accuracy, AI can occasionally produce errors or outdated information. Please independently verify critical details.