Peaks portfolios' expected returns are about to change

In the Peaks app and on our site, you can see what you can roughly expect in terms of long-term returns if you invest with a given Peaks portfolio. On the 10th of September, we're going to update these estimations to keep them as accurate as possible.

Peaks portfolios outperform expectations

At Peaks, we base our expected return estimations on those of the Dutch government's Parameters Committee. They calculate historical averages over a long period (more than 100 years) and adjust their estimations in accordance with current events. For instance, they take into account the valuation of equities and (real) interest rates.

In recent years the Commission adjusted its expected long-term return on equities downwards - most recently from 7.3% to 5.4%. But in practice, equity returns are much higher than the Commission expects. In the case of the Peaks portfolios with a large equity component, these returns are substantially higher.

Bringing expectations closer to reality

We have come to realise that the difference between our public estimations and what investing with Peaks shows in practice is too large. That's why we've decided to adjust the expected returns shown in the forecast tool in our app and on our website . We are still using the historical returns from the Parameters Committee, but no longer apply the (subjective) downward adjustment. As a result, the expected returns you see at Peaks will soon solely be based on historical performance over a period of more than 100 years.

A better picture of your investments over the long term

Now for the most important thing: as a Peaks customer, how will this affect you? Nothing will change in terms of the actual performance of your investments. This change will only affect the return estimations shown in your forecast tool – effectively making them higher.

Table 1. Difference between current and new expectations.

*Before Peaks and index funds fees.

By adjusting these expected return estimations, we believe we're giving you a better picture of what you can expect from your investments in Peaks portfolios over the long term.

In summary

This change will take effect on 10th September, 2024. You won't have to do anything, you just might notice that the expected final value of your investments has gone up.