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Indexed Strategy Illustrator

See how a cap, a floor, and a participation rate actually change what gets credited each year, against a plain market return and a flat fixed rate — using a return sequence you control.

The default year-by-year returns are an illustrative back-and-forth pattern, not historical market data. This is a mechanical illustration of a crediting formula, not a prediction, and not a comparison of 'best of both worlds' — the cap means the indexed line can end below the market line in strong years, which this chart shows on purpose.
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Annual market returns (editable, illustrative)

Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
Yr 8
Yr 9
Yr 10

Market, ending value

$112,430

Indexed, ending value

$183,320

Fixed, ending value

$134,392

How it works: each year, the indexed strategy's credited rate is the market return times the participation rate, clamped between the floor and the cap. A -40% market year credits the floor (never negative, if the floor is 0%), but a +20% market year above the cap only credits the cap — the same mechanism that protects the downside also limits the upside.

Why the market line can end higher: caps compound. Losing a few points of upside in several strong years can outweigh what the floor saved in one weak year, depending on the actual sequence — try raising the cap or lowering the floor to see the tradeoff shift.

Sources & further reading

SEC Investor.gov: Investor Bulletin — Indexed Annuities