Simulation assumptions are the three modelling choices applied to every backtest — Costs & interests, Taxes, and Reinvest profits — that decide whether results include trading costs and financing, whether tax is deducted, and whether profits compound. They sit above the results as a toggle group labelled Simulation assumptions, with a {count} on count of how many are active. The word "Assumptions" is no longer used as a navigation label — this group carries the name.
Instant-recompute vs persisted
The three toggles and the rates behind them behave differently, which is the key to reading them:
- Instant-recompute — the toggles. Flipping Costs & interests, Taxes, or Reinvest profits switches what you see immediately, with no new run. Fincanva computes every combination when the strategy runs, so a toggle just reads the matching already-computed variant.
- Persisted — the rates. The values behind the toggles — your cost and interest assumptions, and your tax rates and regime — are saved in Settings. Changing a rate is a settings change: it flips the run to Out of date and only takes effect after the strategy re-runs.
Defaults in Fincanva
- Costs & interests covers trading costs, financing, and interest; Taxes covers tax on dividends and realized capital gains; Reinvest profits compounds realized profits.
- These three choices govern the Analysis views. The Holdings view ignores them and always reads the gross, fully-reinvested version, which is why the two can show different numbers.
- By default a backtest is shown with Costs & interests and Taxes off and Reinvest profits on — so out of the box the numbers are gross of costs and tax, with profits compounding.
- Reinvest profits also drives which annualized-return metric appears: on shows CAGR (geometric), off shows AAGR (arithmetic).
Worked example
A strategy is showing a gross return with Taxes off. You flip Taxes on: the displayed return, its annualized figure, and the monthly numbers all drop to their after-tax values immediately, because that variant was pre-computed at the last run — no new run happens. What persists is everything you didn't touch: the run itself, the strategy's settings, and your saved tax rates are all unchanged, so flipping Taxes back off restores the gross view instantly. Editing a tax rate in Settings is the opposite kind of change — that is persisted, and the strategy must re-run before the new rate shows up.
Switching an assumption changes what a past run is reported to have produced, not what a strategy will produce. Fincanva provides no financial advice — see Is this financial advice?.
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Fincanva provides no financial advice. Backtests show what would have happened — not what will.
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