PWM Portfolio Simulator

| Private Wealth Management Portfolio Simulator

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New to this tool? Start on 1 · Setup to enter the client name, horizon, and fees — then set allocations, configure cash flows, and click Run.

Report Details

Client Name

Advisor Name

Date Prepared

Portfolio Parameters

Initial Value ($)

Analysis Horizon (yrs)

Inflation (%/yr)

Advisory Fee (%/yr)

Fee must be between 0.10% and 2.00%

Simulations

Tax Treatment

▼

Tax-exempt / tax-deferred treatment — no income or capital gains taxes applied to simulation.

Excise / Regulatory Tax

Excise Tax Rate (%)

Applied to net investment income & gains. Use 1.39% for private foundations (IRC §4940). Zero for public charities.

Tax Rates

Ordinary Income (%)

Qual. Dividend (%)

LT Capital Gains (%)

ST Capital Gains (%)

Excise / Flat Rate (%)

State Taxes

State Income Tax (%)

State Cap Gains (%)

State rates are added to the federal rates above and applied to the same income bases. Leave at 0 for no state tax modeling.

Cost Basis

% of Annual Turnover Taxed as ST Gains

Basis Method

↑ Basis % fields are now visible in the Asset Allocation table above, next to each asset class allocation.

Note: turnover rates per asset class sourced from Wilshire Associates. Tax drag sequence each year: (1) apply return, (2) subtract taxes, (3) take distribution.

Estimated Annual Tax Drag Breakdown

Asset Allocation

Portfolio 1 Alternate

Asset Class	Allocation %	Value ($)	Basis %
Total	100.0%	—

Asset Class	Allocation %	Value ($)	Basis %
Total	100.0%	—

⚠ Allocations must sum to 100%.

Portfolio 1 Name

Portfolio 2 Name

Cash Flows

Distribution / Withdrawal Method

Annual Distribution Rate

% per year

Annual Amount ($)

Direction

Grow by inflation each year

▶ Customize year-by-year amounts

Positive = contribution · Negative = distribution. Override individual years below.

Base annual distribution as a % of portfolio, with additional one-time or recurring fixed cash flows layered on top. Use for foundations with a standard payout rate plus planned gifts, capital calls, or extraordinary distributions.

Base Distribution Rate

% per year

Fixed Cash Flow Overrides

Enter additional contributions (+) or distributions (−) by year. Leave blank for years with no override. These stack on top of the % distribution each year.

Year	Contribution ($)	Distribution ($)	Net

Run simulation to see results

Inputs have changed — re-run to update results.

Sustain Prob.

—

full horizon

Median End Value

—

nominal

Distribution Rate

—

annual

Est. Tax Drag

—

on gross return

Compare Δ Median

—

vs. Portfolio 1

Projected Portfolio Values · $000s

Hypothetical Range of Outcomes

Configure inputs and run simulation

Portfolio Allocation

Proj. Annual Return

—

arithmetic

Compound Return

—

after fees & tax

Volatility

—

annualised std dev

Sharpe Ratio

—

risk-adjusted return

Portfolio Yield

—

weighted

Est. Tax Drag

—

annual on gross return

Portfolio 1

Alternate

Portfolio Statistics Comparison

What happens at different withdrawal rates?

Portfolio 1 Alternate

WITHDRAWAL RATE

0%2.5%5%7.5%10%

0.0%

Portfolio Balance (median, today's $)

25th–75th percentile

Cumulative Distributions (today's $)

Starting Value

Quartile Ending Balance by Distribution Rate

Year-20 terminal portfolio value across distribution rates. Ending Value Ratio = median ending value as % of starting portfolio. Green ≥ 100% · Amber 50–99% · Red < 50%

Rate	25th Percentile	Median	75th Percentile	Survival	Ending Value Ratio

◀ = current simulation rate · Survival = % of scenarios with portfolio value > $0 at full horizon

Historical Stress Tests

Deterministic paths overlaid on simulation

Portfolio 1 Alternate

Select historical episodes to run as deterministic stress paths. Each scenario replays actual asset-class returns for the episode period, then continues with long-run CMAs for remaining years.

Maximum 4 scenarios at a time. Deselect one to add another.

Stress Path Results

Scenario

Lowest Point

Ending Value

vs. Base Case

Projected Cash Flow Detail — Median Path

Portfolio 1 Alternate

Report Pages — drag to reorder

⠿Cover Page
Use simplified cover (no parameters sidebar)
⠿Executive Summary
⠿Portfolio Allocation
⠿Range of Outcomes
⠿Distribution Impact Analysis
⠿Ending Portfolio Value by Withdrawal Rate
⠿Cash Flow Scenario Analysis (taxable)
⠿Payout Policy Analysis (tax-exempt only)
⠿Historical Stress Scenarios
⠿Historical Stress Scenarios — Alternate
⠿Cash Flow Detail
⠿Capital Market Assumptions
⠿Portfolio Comparison
⠿Hypothetical Performance Disclaimer (mandatory)

Orientation Landscape Portrait

Dollar Display Show real (today's dollars) throughout

Tax Detail Show after-tax return, risk & tax drag

Important Disclosures

This tool is intended for use by authorized William Blair wealth management professionals only and is not for distribution to clients in its current form. The projections shown are hypothetical, based on forward-looking Capital Market Assumptions (CMAs) provided by Wilshire Associates, and are intended for illustrative and planning purposes only. Hypothetical performance results have many inherent limitations and do not reflect actual investment results. There is no guarantee that any portfolio will achieve results similar to those shown. Past performance does not guarantee future results. All investments involve risk, including the possible loss of principal.

Monte Carlo simulation generates a range of possible outcomes based on statistical assumptions about asset class returns, volatility, and correlations sourced from Wilshire Associates. Tax calculations are simplified estimates and do not constitute tax advice. Clients should consult a qualified tax advisor regarding their specific circumstances.

William Blair & Company, L.L.C. is a registered investment adviser and broker-dealer. Member FINRA/SIPC. Additional information is available in our Form ADV.

PWM Portfolio Simulator

User Guide & Technical Reference · Wilshire Associates

Portfolio Simulator — Overview

Monte Carlo projection tool for UHNW and family office clients

Purpose: Generate probability-weighted projections of portfolio sustainability, corpus preservation, and distribution capacity using Capital Market Assumptions from Wilshire Associates across 17 asset classes with a full correlation matrix.

Recommended Workflow

Setup tab — Enter client name, advisor name, and date. These flow into every report page.

Allocation tab — Enter asset class weights (must sum to 100%). Optionally add a comparison portfolio with the + Compare button.

Cash Flows tab — Select distribution mode and enter cash flow assumptions.

Setup tab → Tax Treatment — Select Tax-Exempt or Taxable and configure rates.

Click Run in the bottom-left footer to run the simulation.

Review results in the Simulation, Allocation, Distribution, Stress, and Cash Flow panels.

Switch to the Report tab → configure pages, toggle tax detail display, generate PDF.

Technical Requirements

Chrome or Edge recommended. No installation, login, or internet connection required for simulation. Internet is required only for report typography (Google Fonts — system fonts substitute if offline). The file is fully self-contained.

Input Panel Reference

Setup Tab

Field	Description
Client Name	Appears on cover page and report headers. Example: "Smith Family Foundation"
Advisor Name	Preparer name — appears in the report footer
Date Prepared	Auto-populated with today's date. Edit freely.
Initial Portfolio Value	Starting balance in dollars. Accepts values in millions (e.g., 5620000 for $5.62M).
Time Horizon	Years to project. Range 1–50.
Inflation Rate	Annual CPI assumption for deflating nominal values to real purchasing power. Default 2.3%.
Simulations	Number of Monte Carlo paths. 5,000 recommended; 10,000 for maximum precision.
Advisory Fee	Annual fee deducted from projected returns per SEC Marketing Rule (Rule 206(4)-1). Default 0.50%/yr.

Allocation Tab

Enter percentage weights for up to 17 Wilshire asset classes. Weights must sum to exactly 100% before the simulation runs. Use + Compare to add an alternate portfolio for side-by-side analysis. Portfolio names are editable — changes propagate to all labels and report pages in real time.

Cost Basis (Taxable mode): Choose Portfolio-level or Asset class level. Toggle between Total Cost Basis ($) and % Cost Basis inputs. When Asset class level is selected, the left panel widens to show a Basis % column in the allocation table. The % of Annual Turnover Taxed as ST Gains field also appears in this section — set to 0% for all long-term treatment, 100% for all short-term. The default of 20% reflects a typical blend for diversified portfolios.

Cash Flows Tab

Mode	Description
% of Portfolio	Distributes a fixed percentage of beginning-of-year balance. Standard IRS approach for private foundations (minimum 5%).
Fixed Amount	Fixed nominal dollar amount each year regardless of portfolio value. Customize year-by-year in the expandable table.
Custom Schedule (default)	Year-by-year entry of contributions and distributions. Use for capital campaigns, planned gifts, or irregular payout schedules.

Tax Treatment (Setup Tab)

Tax-Exempt: For 501(c)(3) private foundations. Only IRC §4940 excise tax applies. Enter 1.39% (current SECURE 2.0 rate) or 2% for older scenarios.

Taxable: Full tax load — ordinary income on yield, long-term capital gains on turnover-driven realized gains, short-term capital gains on high-turnover assets. Add state rates on top of federal. Cost basis method controls how embedded gains are estimated.

Field	Default	Notes
Ordinary Income (%)	40.8%	Federal rate including 3.8% NIIT; state income tax added separately
Qual. Dividend (%)	23.8%	Applied to equity yield (Global Equity, Real Estate). 20% federal + 3.8% NIIT surtax.
LT Capital Gains (%)	23.8%	Federal long-term rate
ST Capital Gains (%)	40.8%	Same as ordinary income for most UHNW clients
Excise / Flat Rate (%)	0.0%	For foundations or flat-rate structures
State Income Tax (%)	0.0%	Added to ordinary and qualified dividend rates
State Cap Gains (%)	0.0%	Added to LT and ST rates. Combined rate = simple addition (post-TCJA SALT cap).

Note: Tax drag is a constant annual estimate — it does not model tax-loss harvesting, specific lot accounting, or year-to-year variation in realized income. Results are conservative estimates.

Results Panels

Simulation Panel

Shows the Hypothetical Range of Outcomes fan chart and Projected Portfolio Values percentile table. The fan chart displays 5th, 25th, 50th (median), 75th, and 95th percentile paths in nominal dollars. In compare mode, both portfolios share the chart. The title appends "(After-Tax Est.)" when taxable mode is active.

Allocation Panel

Donut chart of current portfolio weights with a statistics strip showing Projected Annual Return (arithmetic), Projected Compound Return (geometric), Volatility, Sharpe Ratio, and Weighted Yield. In compare mode, both portfolios appear side-by-side with a comparison grid below.

Distribution Panel

Distribution Impact Analysis: Sweeps distribution rates 0%–8% and shows corpus preservation over the horizon. The 0% rate is selected by default. Click any rate button to view that scenario. Toggle between portfolios in compare mode.

Quartile Ending Balance: Terminal portfolio value at each rate across the 25th, Median, and 75th percentile. Toggle between Nominal and Real (today's dollars). The Ending Value Ratio is the median terminal value as a percentage of the real initial value.

The Distribution panel uses a separate sub-simulation (up to 600 paths) — results may differ slightly from the main Simulation panel percentiles.

Stress Panel

Select up to 4 historical scenarios (GFC, Dot-Com, Stagflation, COVID, 2022 Rate Shock, Black Monday, Lost Decade, 1990–91 Recession). Each scenario replays actual asset-class returns for the crisis period, then continues with long-run CMAs. The COVID Crash scenario is split into two annual periods — the crash phase (Feb–Mar 2020 drawdown) and the recovery phase — so the chart reflects the visible dip and rebound rather than the net flat full-year return. Results show trough value, recovery time, and terminal value vs. the Monte Carlo median. Toggle between portfolios in compare mode.

Cash Flow Panel

Year-by-year detail table: Beginning Balance, Investment Return, Tax, Distributions, Ending Balance, and three percentile paths (5th, Median, 95th). Toggle between portfolios in compare mode. All values in whole dollars.

KPI Strip

The bar below the tab nav shows four always-visible metrics: Sustain Prob. (% of simulations ending above $0), Median End Value (nominal, Year N), Distribution Rate, and Est. Tax Drag. In compare mode a fifth cell shows the Δ Median between portfolios.

Report Generation

Click the Report tab (far right of the panel nav) to access report options. Configure pages, then click Generate Report to open a print-ready window.

Report Pages

Page	Contents
Cover Page	Client name, advisor, date, key finding sentence, simulation parameters sidebar
Executive Summary	Key Takeaway callout, Probability and Median Value KPI tiles, Analysis Overview narrative, Key Findings table
Portfolio Allocation	Donut chart, allocation detail table, statistics. In compare mode: side-by-side donuts with stats boxes aligned at bottom.
Range of Outcomes	Fan chart image and percentile table across snapshot years
Distribution Impact Analysis	Corpus preservation chart and sidebar stats at selected distribution rate. Tax-exempt mode only.
Ending Portfolio Value by Withdrawal Rate	Quartile table in today's dollars across key withdrawal rates. Tax-exempt mode only.
Payout Policy Analysis	Foundation only (tax-exempt): 5% IRS minimum requirement analysis with year-by-year payout table
Historical Stress Scenarios	SVG chart and scenario summary table for Portfolio 1. Alternate portfolio page available in compare mode.
Cash Flow Detail	Year-by-year cash flow table, split into 10-year chunks for long horizons
Capital Market Assumptions	Full Capital Market Assumptions table with portfolio holdings highlighted
Hypothetical Performance Disclaimer	Required disclosure — always last, cannot be removed or reordered

Report Options

Drag to reorder: Grab the ⠿ handle on any page row and drag to change page order.

Orientation: Landscape (default) or Portrait. Landscape is recommended for tables and multi-portfolio comparisons.

Tax Detail toggle: When unchecked (default), after-tax return, after-tax risk, and annual tax drag are suppressed from all report pages — producing a cleaner presentation for clients who don't need to see tax mechanics.

Saving to PDF: Click Print / Save PDF → choose "Save as PDF" as the destination. Uncheck "Headers and footers" in the print dialog to remove browser page numbers.

Tip: Run the simulation before generating the report. If you change inputs after running, the ⚠ indicator appears in the bottom-left footer — re-run before generating to ensure outputs are current.

Simulation Methodology

Capital Market Assumptions

The tool embeds capital market assumptions from Wilshire Associates for 17 asset classes: geometric return, arithmetic return, volatility, cash yield, and annual turnover rate. A full 17×17 correlation matrix governs co-movement. Only asset classes with non-zero weights are included — the correlation matrix is extracted as an active sub-matrix.

Monte Carlo Engine

For each simulation path and each annual time step:

A vector of independent standard normal random numbers is drawn (one per active asset class).
The Cholesky factor L of the correlation matrix is applied: correlated_z = L × z
Each asset's annual return: r_i = μ_i + σ_i × correlated_z_i (arithmetic returns used for path calculation)
Weighted portfolio return applied to balance, then tax drag and distributions subtracted.

Tax Drag (Taxable Mode)

Annual tax drag is estimated as a fixed percentage of beginning-of-year balance:

          Yield Income = Σ(w_i × yield_i)

          LT Gains = Σ(w_i × (arith_i − yield_i) × turnover_i × (1 − ST_split))

          ST Gains = Σ(w_i × (arith_i − yield_i) × turnover_i × ST_split)

          τ_annual = (Yield × Eff_Ord) + (LT × Eff_LT) + (ST × Eff_ST) + Excise

After-tax return: r_after_tax = r_geo − τ_annual − advisory_fee
After-tax volatility: σ_at = σ_p × (1 − τ_eff) where τ_eff is the income-weighted blended rate.

Annual Simulation Sequence

Apply investment return to current portfolio value
Subtract annual tax drag (% of beginning-of-year balance)
Subtract advisory fee (% of beginning-of-year balance)
Apply scheduled cash flow (distribution or contribution)
Floor at $0 — portfolio cannot go negative

Distribution Impact Analysis (Spending Frontier)

Sweeps distribution rates 0%–8% using a sub-simulation of up to 600 paths. At each rate, computes percentile paths and the Ending Value Ratio (median terminal real value ÷ real initial value). Results are independent of the main simulation.

Historical Stress Testing

Deterministic — no random draws. For each shock year, applies allocation-weighted historical returns. After the scenario ends, continues at the portfolio arithmetic return for remaining years. Eight scenarios are included: GFC (2008–2009), Dot-Com Bust (2000–2002), 1970s Stagflation (1973–1974), COVID Crash (2020 crash + recovery), 2022 Rate Shock, Black Monday + S&L (1987–1990), Lost Decade (2000–2009), 1990–91 Recession.

Each annual shock return is computed as 12 geometric monthly sub-steps, with tax and fee drag applied monthly on the beginning-of-month balance. This more accurately reflects within-year compounding for volatile episodes. Only year-end values are plotted; the chart scale remains annual. Note: TIPS values in pre-1997 scenarios (Stagflation, Black Monday) are proxied, as the instrument was introduced in 1997. The Black Monday 1987 full-year S&P return was net +5.1% — the intra-year October crash recovered by December, so the annual model does not show a visible first-year decline for that scenario.

Modeling Limitations

For compliance reviewers and advisors. Consistent with standard industry practice for long-horizon Monte Carlo planning tools.

Normal Return Distribution

Draws from a multivariate normal distribution. Fat tails, negative skewness, and regime changes are not modeled. Actual markets exhibit excess kurtosis — severe losses occur more frequently than the normal model implies.

Constant Parameters

Return, volatility, and correlation parameters are fixed throughout the simulation. Time-varying risk premia, volatility clustering, and mean reversion are not captured.

Annual Time Steps

The model steps annually. Intra-year volatility and within-year drawdowns are not captured — only year-end values are observable.

Tax Drag Simplification

Tax drag is a constant annual percentage. Tax-loss harvesting, specific lot accounting, deferral of unrealized gains, and year-to-year variation in realized income are not modeled. Results are conservative estimates.

Implicit Rebalancing

The model assumes continuous rebalancing to target weights. Transaction costs and real-world rebalancing constraints are not modeled.

Inflation Independence

Inflation shocks are drawn independently of asset returns. The empirical correlation between unexpected inflation and asset returns is not explicitly captured.

Private Asset Classes

Private equity, private credit, and private real estate use public-market CMA proxies. Illiquidity premiums, J-curve effects, and vintage-year dispersion are not modeled.

Advisory Fee Structure

Modeled as a flat annual percentage of assets. Tiered schedules, performance fees, and negotiated rates are not accommodated.

Disclosure: Results are hypothetical, based on forward-looking CMAs, and intended for illustrative and planning purposes only. They do not represent actual investment results and are not a guarantee of future performance.