THE REWARDS OF MULTI-ASSET CLASS INVESTING
|
|
- Camron Lindsey
- 6 years ago
- Views:
Transcription
1 INVESTING INSIGHTS THE REWARDS OF MULTI-ASSET CLASS INVESTING Market volatility and asset class correlations have been on the rise in recent years, leading many investors to wonder if diversification still works. Our research finds that building portfolios using multiple asset classes with dissimilar patterns of returns is a strategy that stands the test of time. The concept of wealth diversification is at least as ancient as the 2,000- year- old Talmud1. But it wasn t until modern times that academics like Harry Markowitz, considered the father of modern portfolio theory ( MPT ), statistically demonstrated the risk-return benefits to an investment portfolio of combining assets with low or negative correlations. In the 1950s, Markowitz, a Nobel Prize winner in Economics, showed mathematically how MPT can be used to maximize portfolio expected return for a given amount of portfolio risk, or to minimize risk for a given level of expected return. Several decades later, in 1998, financial adviser Roger Gibson published a landmark paper entitled Asset Allocation and the Rewards of Multiple-Asset-Class Investing. A pioneer in strategic asset allocation, he showed how combining four volatile asset classes with dissimilar patterns of return generated a portfolio with a higher return and dramatically less volatility than a weighted average of the returns and volatilities of the four component asset classes. The paper Gibson assigned equal allocations to each of the four asset classes and studied the period from January 1, 1972-December 31, Since then, much has happened in financial markets, including two stock market crashes and rising cross-asset-class correlations. This paper revisits and extends the research to study the same multi-asset class portfolios performance for the 40 years stretching from August 1, 1972-July 31, 2012 (with quarterly rebalancing) to see if the original conclusion still holds. How Does Diversification Work? Before going into our findings, let s briefly define four terms that are basic to understanding the concept of portfolio diversification. Return: This is the amount an investor earns on an investment. For instance, a 4% return on $100 investment is $4. Risk: Here, we re referring to the extent of price swings, or volatility, of a security over an investment time period. For example, if a $100 stock swings between $80 and $120 in the course of a year, we consider it riskier, or more volatile, than another $100 stock that fluctuates between values of $85 and $115 during the same time period. Risk may also be quantified as standard deviation, which measures this swing: the higher the standard deviation, the more volatile the asset price. Correlation: Correlation is a statistical measure of the extent to which, and the direction in which, the prices of multiple assets move in relation to each other.mathematically, correlations range from -1 (perfect negative correlation, where assets move by equal magnitude in opposite directions) to +1 (perfect correlation, where assets move by equal magnitude in the same direction), with 0 correlation signifying no relationship among the assets price movements. Ideally, we want to add assets to a portfolio that behave differently from the existing portfolio elements, since low (or better yet, negative) correlating assets enhance diversification and reduce volatility. Knowledge of the historical correlations between securities is vital to selecting securities that can potentially maximize a portfolio s risk-adjusted return. Efficient Frontier: A portfolio that minimizes volatility for a given expected return, or maximizes expected return for a given level of volatility, is considered efficient. Efficient portfolios make efficient use of risk. Combining the various efficient portfolios for a given group of asset classes results 1 The Talmud states: Let every man divide his money in three parts, and invest a third in land, a third in business, and a third let him keep in reserve. Investment Products & Services Not insured by FDIC or any Federal Government Agency May Lose Value Not a Deposit or Guaranteed by a Bank or any Bank Affiliate Gerstein Fisher is a division of People s Securities, Inc., a Broker/Dealer, member of FINRA and SIPC, and a registered investment advisor. People s Securities, Inc. is a subsidiary of People s United Bank, N.A. For Current and Prospective Client Use
2 Exhibit 1: A Hypothetical Efficient Frontier Risk vs. Return Equity Commodities Bonds Exhibit 2: Risk and Return of the Four Indices Aug. 1, 1972 Jul. 31, 2012 Annualized Annualized Standard Deviation (%) S&P 500 Index [A] MSCI EAFE Index (gross div.) [B] Nareit (Equity REITs) [C] S&P GSCI TR [D] Risk (%) Source: Bloomberg; Ibbotson Sinquefield; Standard and Poor s Index Services Exhibit 3: Correlations of the Four Indices Aug. 1, 1972 Jul. 31, 2012 S&P 500 Index S&P 500 Index 1 MSCI EAFE Index NAREIT (Equity REITs) S&P GSCI TR in what is called the efficient frontier. The appropriate efficient portfolio for each investor depends on the individual s risk tolerance. An example of this trade-off between volatility and return is depicted in Exhibit 1. The Four-Asset Class Portfolio Now that we have described the benefits of diversification, let s look at how it works in real-world portfolio construction. We ll use four popular indices to represent the four asset classes in Gibson s original study and create portfolios using them. A. S&P 500: Proxy for the US equity market B. MSCI EAFE: Proxy for the equity market of developed countries outside the US and Canada (international stocks) C. NAREIT: Proxy for US equity real estate investment trusts (REITS) D. S&P GSCI: Goldman Sachs Commodity Index, a benchmark for commodities futures contracts The actual risk and return profiles and the correlation matrices of the four indices during the 40-year time period August 1, 1972 to July 31, 2012 are shown in Exhibits 2 and 3: MSCI EAFE Index Nareit (Equity REITs) S&P GSCI TR Source: Gerstein Fisher Research, Standard and Poor s Index Services, and MSCI To test the benefits of diversification, we use the above four indices to construct various portfolios and examine their performance. Investing an equal amount in each index, the four indices can be used to construct a total of 15 different portfolios, including four single-asset portfolios. The possible combinations of portfolios are shown in Exhibit 4: Exhibit 4: The 15 Asset Class Portfolios Portfolio S&P 500 Index [A] MSCI EAFE Index (gross div.) [B] NAREIT (Equity REITs) [C] S&P GSCI TR [D] AB AC AD BC BD CD ABC ABD ACD BCD Remark 100% invested in each asset 50% invested in each asset 1/3 invested in each asset ABCD 1/4 invested in each asset Source: Gerstein Fisher Research, Standard and Poor s Index Services, com and MSCI 2
3 So for example, a two-asset portfolio like AB represents 50% invested in US stocks [A] and 50% invested in international stocks [B]. A three-asset portfolio such as BCD represents one-third allocations in each of international stocks, real estate and commodities. Similarly, the ABCD portfolio is equally invested among the four asset classes. The Quest for Consistency To illustrate the importance of diversification in the real world, we ranked all the portfolios in terms of their annual returns for the past 12 years from January 1, 2000-December 31, Exhibit 5 shows each of the 15 portfolios ranked from best (top) to worst (bottom) in each year. Notice that nearly every one of the top-performing portfolios is a single-asset one, and that all of the worst performers are also single-asset portfolios. For example, in 2001 commodities (D) was the worst performer among the lot, but the next year it was the top performer. The wild swings in commodity returns are reflected in its high standard deviation, or risk, as seen in Exhibit 2. Now take a look at ABCD, the most diversified portfolio. This one is always ranked in the middle, irrespective of how other portfolios have behaved. In other words, this portfolio is built to provide stable returns with much less risk than single- or two-asset portfolios. Moving Out on the Efficient Frontier Note that Exhibit 5 is based only on returns. We also need to analyze the risk associated with these returns, since the major benefit of diversifying a portfolio is to reduce the amount of risk associated with individual asset classes. In Exhibit 6 on the next page we chart the risk (as measured by standard deviation) and returns of all 15 asset-class combinations from August 1, 1972-July 31, Exhibit 5: Year-by-Year Return Rankings of 15 Portfolios D C D B C D C D AC B C C CD AC CD BC BC CD BC BD A BC AC AC C BC BD C CD BD B AD C ABC CD CD ACD ABC BCD ABC BCD BCD ABC ABD ACD AB BC ACD BCD ACD C AB AC AD AC B ABC AC ACD A AD CD ACD AC ABC ABD AB BCD ABCD C ABC AD BD A AD BCD ABCD ACD A AB BC ABCD ABCD ABCD ABCD ABCD ABCD ABCD ABCD ABCD ABCD ABCD AD A A ABC AC BCD ABD BD B B BCD CD AB BCD BCD D ABD AB BC ABD BD BC ACD ACD BCD ACD AD BCD BC B AC ACD ABD C CD A ABD ABD AB BC ABC ABD ABC CD D ABC ABD ABC CD BD ABD ABD A AD B A AB AB BD BC BD CD D AB AB BD AB AD AD AC AD AC B AD BD BD B D A D A A D C D D B B Source: Gerstein Fisher Research, NAREIT, Morningstar 3
4 Exhibit 6: Risk and Return of the 15 Asset-Class Combinations Aug. 1, 1972 Jul. 31, 2012 (With Quarterly Rebalancing) Multi-Asset-Class Investing Returns and Risk Standard Deviation (%) S&P GSCI TR [D] MSCI EAFE Index (gross div.) [B] AB S&P 500 Index [A] BD ABD AD Source: Gerstein Fisher Research, NAREIT, Morningstar As we can see in Exhibit 6, the benefits of creating diversified portfolios using multiple asset classes with dissimilar patterns of returns are powerful. When combining such assets, portfolios generally shift to the lower right quadrant: higher return and lower risk (as measured by standard deviation). In finance parlance and first described by Markowitz, this is the improved efficient frontier for portfolios: higher expected return for a given level of volatility, or lower volatility for a given level of expected return, as explained earlier. BC BCD ABC X ABCD AC NARIET (Equity REITs) [C] CD ACD More Asset Classes, Potentially Less Risk Note the consistent reduction in volatility as we move from single-asset to 3- and 4-asset class portfolios in the graph. Five of the six lowest-volatility portfolios were 3- or 4-asset class ones. Real estate had the second-lowest standard deviation after US stocks, but every multi-asset class portfolio had lower volatility than real estate. The 4-asset class portfolio reduced risk by one-third when compared to the average of the same four asset classes. Clearly, there will be periods during which domestic stocks will outperform foreign stocks (and vice versa), REITs will beat equities, and so on. But who among us has the clairvoyance to predict when these cycles will begin and end? This is why multi-asset diversification continues to make sense. Finally, we should note that our use of equally weighted multiple- asset- class portfolios is for the sake of demonstrating some important portfolio diversification principles and is by no means intended as a portfolio allocation recommendation. Conclusion In an industry prone to fads, thoughtful portfolio diversification is a long-term investment strategy that stands the test of time. By combining multiple-asset-classes with low or negative correlations, an investor may achieve a higher portfolio return and a significant reduction in risk. That almost sounds like a free lunch. It is also instructive to look at some specific examples in the graph. Commodities (represented by the S&P GSCI and letter D in Exhibit 6) had the lowest return and the highest risk during the 40-year period. But look what happens when this seemingly less attractive asset class is combined with others. For instance, when combined with US stocks, the two-asset portfolio (AD) has a higher return and lower volatility than US stocks alone, due to different return patterns and the quarterly rebalancing discipline. Overall, four of the five highest multi-asset-class returns had commodities in the portfolio since commodities had the strongest diversification potential when combined with other asset classes. Three of the four worst returns occurred in single-asset class portfolios. 4
5 This is a publication of People s Securities, Inc. doing business as Gerstein Fisher. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. Past performance is not an assurance of future results. This presentation is for informational purposes only and should not be construed as an offer to buy or sell any financial instruments. Market indices referenced herein are unmanaged and representative of large and small domestic and international stocks and bonds, each with unique risks. Information about them is provided to illustrate market trends and does not represent the performance of any specific investment. International investments may be subject to currency fluctuations, potential political unrest, and other risks not associated with domestic investments. Remember, past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this document, will be profitable or equal any corresponding indicated historical performance level(s). Diversification cannot eliminate the risk of investment loss. Investments related to gold and other precious metals are considered speculative and are affected by a variety of world-wide economic, financial and political factors. Performance results have been compiled exclusively by Gerstein Fisher, and have not been independently verified. Gerstein Fisher maintains all information supporting the performance results in accordance with regulatory requirements. Due to various factors, including changing market conditions, the content of this presentation may no longer be reflective of current opinions, positions, or recommendations. Moreover, you should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from Gerstein Fisher. Please remember to contact Gerstein Fisher. if there are any changes in your financial situation or investment objectives or if you wish to impose, add or to modify any reasonable restrictions to our investment advisory services. Information pertaining to Gerstein Fisher s advisory operations, services, and fees is set forth in Gerstein Fisher s current disclosure statement, a copy of which is available from Gerstein Fisher upon request info@gersteinfisher.com FALL 2012/SPRING 2017
COMMODITIES AND A DIVERSIFIED PORTFOLIO
INVESTING INSIGHTS COMMODITIES AND A DIVERSIFIED PORTFOLIO As global commodity prices continue to linger in a protracted slump, investors in these hard assets have seen disappointing returns for several
More informationAsset allocation for volatile markets
Asset allocation for volatile markets Guest Presenters: Harold Evensky, President of Evensky & Katz Wealth Roger Gibson, Chief Investment Officer of Gibson Capital COPYRIGHT 2011 fi360 ALL RIGHTS RESERVED
More informationPART TWO: PORTFOLIO MANAGEMENT HOW EXPOSURE TO REAL ESTATE MAY ENHANCE RETURNS.
PART TWO: PORTFOLIO MANAGEMENT HOW EXPOSURE TO REAL ESTATE MAY ENHANCE RETURNS. MAY 2015 Burland East, CFA CEO American Assets Capital Advisers Creede Murphy Vice President, Investment Analyst American
More informationReturns on Small Cap Growth Stocks, or the Lack Thereof: What Risk Factor Exposures Can Tell Us
RESEARCH Returns on Small Cap Growth Stocks, or the Lack Thereof: What Risk Factor Exposures Can Tell Us The small cap growth space has been noted for its underperformance relative to other investment
More informationPursuing a Better Investment Experience
Pursuing a Better Investment Experience Last updated: April 2016 1. Embrace Market Pricing World Equity Trading in 2015 Daily Average Number of Trades 98.6 million Dollar Volume $447.3 billion The market
More informationNATIONWIDE ASSET ALLOCATION INVESTMENT PROCESS
Nationwide Funds A Nationwide White Paper NATIONWIDE ASSET ALLOCATION INVESTMENT PROCESS May 2017 INTRODUCTION In the market decline of 2008, the S&P 500 Index lost more than 37%, numerous equity strategies
More informationUnderstanding ASSET ALLOCATION
Understanding ASSET ALLOCATION An Educational Guide for Your Financial Future VLC0443-0917 . TABLE OF CONTENTS Get Ready for Retirement... 1 What Is Asset Allocation?... 1 Diversification May Lessen the
More informationAn Introduction to Dynamic Overlay
Tactical investment strategy striving to preserve and grow client wealth An Introduction to Dynamic Overlay www.mrminv.com 12444 Powerscourt Drive Suite 350, St. Louis, MO 63131 1-(800) 233-1944 Q4 2018
More informationINVESTMENT PLAN. Sample Client. For. May 04, Prepared by : Sample Advisor Financial Consultant.
INVESTMENT PLAN For Sample Client May 04, 2012 Prepared by : Sample Advisor Financial Consultant sadvisor@loringward.com Materials provided to approved advisors by LWI Financial Inc., ( Loring Ward ).
More informationManaged Futures & Rising Rates January 2017
Managed Futures & Rising January 2017 Aspen Partners, Ltd. / 9 East Franklin Street / Richmond, VA 23219 866.277.3619 / info@aspenpartners.com Key Points Advisors should be contemplating portfolio changes
More informationIntegrated Wealth Management. Portfolio management i financial planning i tax services
Integrated Wealth Management Portfolio management i financial planning i tax services CRITICAL FACTORS FOR LONG TERM SUCCESS 1EMBRACE MARKET PRICING The market is an effective, information-processing machine.
More informationRisk-Efficient Investment Portfolios from AlphaSimplex Group. Strategies that put risk management first
Risk-Efficient Investment Portfolios from AlphaSimplex Group Strategies that put risk management first Agenda About AlphaSimplex Group (ASG) The need for active risk management Introducing the AlphaSimplex
More informationTechnical Guide. Issue: forecasting a successful outcome with cash flow modelling. To us there are no foreign markets. TM
Technical Guide To us there are no foreign markets. TM The are a unique investment solution, providing a powerful tool for managing volatility and risk that can complement any wealth strategy. Our volatility-led
More informationAn All-Cap Core Investment Approach
An All-Cap Core Investment Approach A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all figures are based in USD. 1 What is an All-Cap Core Approach An All-Cap Core investment
More informationThe Best Income Portfolio For Every Market Condition
The Best Income Portfolio For Every Market Condition The All Seasons Hedged Portfolio Dr. J.B. Farwell About the Author. [ Dr. J.B. Farwell, author of a best-selling investment book, "Buffett and Beyond"
More informationAddition Through Subtraction: Thinking Strategically About Managing Tax Liabilities
Strategic Advisory Solutions April 2015 Addition Through Subtraction: Thinking Strategically About Managing Tax Liabilities Maximizing returns is a key goal for most investors, but many overlook an important
More informationBEYOND SMART BETA: WHAT IS GLOBAL MULTI-FACTOR INVESTING AND HOW DOES IT WORK?
INVESTING INSIGHTS BEYOND SMART BETA: WHAT IS GLOBAL MULTI-FACTOR INVESTING AND HOW DOES IT WORK? Multi-Factor investing works by identifying characteristics, or factors, of stocks or other securities
More informationSchwab Intelligent Portfolios. Investing has changed forever.
Schwab Intelligent Portfolios. Investing has changed forever. Technology that will change the way you invest. Schwab Intelligent Portfolios is an automated investment advisory service that builds, monitors,
More informationThe benefits of core-satellite investing
The benefits of core-satellite investing Contents 1 Core-satellite: A powerful investment approach 3 The key benefits of indexing the portfolio s core 6 Core-satellite methodology Core-satellite: A powerful
More informationPursuing a Better Investment Experience
Pursuing a Better Investment Experience Last updated: February 2017 1. Embrace Market Pricing World Equity Trading in 2016 Daily Average Number of Trades 82.7 million Dollar Volume $346.4 billion The market
More informationRBC Strategic Asset Allocation Models
Page 1 of United States Core Very conservative Last updated: April 17 Risk Profile 1 The focus is capital preservation. The portfolio will typically be invested mainly in fixed income and other low volatility
More informationForum Portfolio Investment Policy Statement
Forum Portfolio Investment Policy Statement Prepared for John Smith and Mary Smith Sunday February 12, 2017 60% Equities / 40% Fixed Income Growth Portfolio I. Purpose This Investment Policy Statement
More informationDo We Invest with Our Hearts or Minds?
Do We Invest with Our Hearts or Minds? How Behavioral Finance Can Dramatically Affect Your Wealth Part One In the first part of a two-part series on how advisors can deliver value to their clients, George
More informationWhat Works. Our time-tested approach to investing is very straightforward. And we re ready to make it work for you. Three important steps.
What Works Our time-tested approach to investing is very straightforward. And we re ready to make it work for you. Three important steps. Ten effective principles. Three important steps. Ten effective
More informationA R I S K - B A S E D A S S E T A L L O C A T I O N P R O G R A M TOPS. Pioneers in Strategic ETF Portfolios. 1 of 20
A R I S K - B A S E D A S S E T A L L O C A T I O N P R O G R A M VALMARK ADVISERS, INC. TOPS Pioneers in Strategic ETF Portfolios 1 of 20 TABLE OF CONTENTS 1 2 3 4 Foundational Investment Management Theory
More informationFactual Studies on Managed Futures Interaction with Stocks
Factual Studies on Managed Futures Interaction with Stocks Trading futures and options involves substantial risk of loss and is not suitable for all investors. The use of the phrase Managed Futures refers
More informationCountry Size Premiums and Global Equity Portfolio Structure
RESEARCH Country Size Premiums and Global Equity Portfolio Structure This paper examines the relation between aggregate country equity market capitalizations and country-level market index returns. Our
More informationBROAD COMMODITY INDEX
BROAD COMMODITY INDEX COMMENTARY + STRATEGY FACTS APRIL 2017 80.00% CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% -80.00% ABCERI S&P GSCI ER BCOMM ER
More informationBROAD COMMODITY INDEX
BROAD COMMODITY INDEX COMMENTARY + STRATEGY FACTS JUNE 2017 80.00% CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% -80.00% ABCERI S&P GSCI ER BCOMM ER
More informationINVESTING LIKE THE HARVARD AND YALE ENDOWMENT FUNDS JUNE Frontierim.com
INVESTING LIKE THE HARVARD AND YALE ENDOWMENT FUNDS JUNE 2016 F Frontierim.com Introduction The US University Endowment Funds ( US Endowment Funds ), such as Harvard and Yale, have been leaders in diversified
More informationPortfolio Snapshot. Sample Report. A proposal for your review. John Adams Financial Advisor Merrill Lynch Wealth Management
Portfolio Snapshot A proposal for your review Sample Report John Adams Merrill Lynch Wealth Management SENSITIVE CLIENT INFORMATION INSIDE Important Information This analysis is a brokerage report that
More informationJ.P. Morgan Structured Investments
July 2017 J.P. Morgan Structured Investments ent JPMORGAN EFFICIENTE (USD) INDEX STRATEGY GUIDE The JPMorgan ETF Efficiente 5 Index Strategy Guide Important Information The information contained in this
More informationManaged Futures: Staying the Course
ALTEGRIS ACADEMY RESEARCH SERIES Managed Futures: Staying the Course Short-term Drawdowns, Long-term Focus June 2012* The Question: For each period, which line do you choose? The Details: Each line represents
More informationHow to Think About Correlation Numbers: Long-Term Trends versus Short-Term Noise
How to Think About Correlation Numbers: Long-Term Trends versus Short-Term Noise SOLUTIONS & MULTI-ASSET MANAGED FUTURES INVESTMENT INSIGHT 2018 A Discussion on Correlation AUTHORS The primary goal for
More informationres Key Ideas great or Over the
Investor Guide Managed Futur res Key Ideas Managed Futures seeks to take advantage of trends in global asset classes These strategies have historically performed best when markets went from good to great
More informationCommercial Real Estate s Correlation to Other Asset Classes June 2015
Commercial Real Estate s Correlation to Other Asset Classes June 2015 Executive Summary The theory of diversification (Markowitz 1952) suggests that putting all of your eggs in one basket (or asset class)
More informationWhy and How to Pick Tactical for Your Portfolio
Why and How to Pick Tactical for Your Portfolio A TACTICAL PRIMER Markets and economies have exhibited characteristics over the past two decades dissimilar to the years which came before. We have experienced
More informationImprove Investor Outcomes with Tac tical Allocation
Improve Investor Outcomes with Tac tical Allocation About Meeder 1974 Tactical Focused on tactical asset allocation and a pioneer of defensive investing Time-tested Managing client assets for more than
More informationASSET ALLOCATION MADE EASY
ASSET ALLOCATION MADE EASY REACHING YOUR GOALS AT YOUR PACE Most people can rattle off their investment goals: retirement, college tuition, a new house. That s easy. What s harder is successfully reaching
More informationHOW TO HARNESS VOLATILITY TO UNLOCK ALPHA
HOW TO HARNESS VOLATILITY TO UNLOCK ALPHA The Excess Growth Rate: The Best-Kept Secret in Investing June 2017 UNCORRELATED ANSWERS TM Executive Summary Volatility is traditionally viewed exclusively as
More informationFoundations of Guidance Capital Market Assumptions and Strategic Asset Allocations
Foundations of Guidance Capital Market Assumptions and Strategic Asset Allocations CHIEF INVESTMENT OFFICE JANUARY 2018 Clients often ask how Merrill Lynch projects the growth of their investments for
More informationThe Household Endowment Model. Adopting Lessons Learned from the Nation's Top Educational Endowments
The Household Endowment Model Adopting Lessons Learned from the Nation's Top Educational Endowments Wealth Strategies Advisory Group (WSAG) and Claraphi Advisory Network LLC (Claraphi) have joined forces
More informationBuilding and Managing a Diversified Portfolio
Building and Managing a Diversified Portfolio Craig L. Israelsen, Ph.D. Designer of the Portfolio Presentation AAII Silicon Valley Chapter April 14, 2018 Based on research by Craig L. Israelsen, Ph.D.
More informationBROAD COMMODITY INDEX
BROAD COMMODITY INDEX COMMENTARY + STRATEGY FACTS AUGUST 2018 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) -80.00% ABCERI S&P
More informationHigh-conviction strategies: Investing like you mean it
BMO Global Asset Management APRIL 2018 Asset Manager Insights High-conviction strategies: Investing like you mean it While the active/passive debate carries on across the asset management industry, it
More informationThe Household Endowment Model. Adopting Lessons Learned from the Nation s Top Educational Endowments WEALTH STRATEGIES SAMEER JAIN
The Household Endowment Model TM Adopting Lessons Learned from the Nation s Top Educational Endowments WEALTH STRATEGIES SAMEER JAIN Wealth Strategies Advisory Group (WSAG) and Claraphi Advisory Network
More informationThe Rewards of Multiple-Asset-Class Investing
The Rewards of Multiple-Asset-Class Investing By Roger C. Gibson CFA, CFP Roger C. Gibson, CFA, CFP, is perhaps best known as the author of Asset Allocation: Balancing Financial Risk, Third Edition (McGraw
More informationWhy Global Dividend Growth?
Why Global Growth? Market Commentary 2018 WHEN INVESTORS ARE LOOKING FOR YIELD, many may consider dividend-paying equities. s offer a potentially consistent form of return and may help buffer risk during
More informationSmart Beta: Index Investing, Evolved
Franklin LibertyShares TM Topic Paper November 2017 Smart Beta: Index Investing, Evolved Global investing literally and figuratively is foreign to many US investors. That s why some have taken a passive
More informationLPL RESEARCH PRIVATE CLIENT INSTITUTIONAL INSIGHTS THOUGHT LEADERSHIP. August 2016 DIVERSIFICATION MAY BE POISED FOR A COMEBACK MEMBER FINRA/SIPC
LPL RESEARCH PRIVATE CLIENT THOUGHT LEADERSHIP INSTITUTIONAL INSIGHTS August 2016 DIVERSIFICATION MAY BE POISED FOR A COMEBACK MEMBER FINRA/SIPC During the first half of 2016, diversification has provided
More informationInvestment Progress Toward Goals. Prepared for: Bob and Mary Smith January 19, 2011
Prepared for: Bob and Mary Smith January 19, 2011 Investment Progress Toward Goals Understanding Your Results Introduction I am pleased to present you with this report that will help you answer what may
More informationA distinctive solution for your plan and employees. TIAA-CREF Lifecycle Funds
A distinctive solution for your plan and employees TIAA-CREF Lifecycle Funds TIAA has nearly 100 years of experience managing money for retirement and nearly 60 years of asset allocation experience. Our
More informationBegin Your Journey With Stock Bond Decisions Prepared by Paul Tanner Chartered Financial Analyst
A Granite Hill Investment Field Guide Begin Your Journey With Stock Bond Decisions Prepared by Paul Tanner Chartered Financial Analyst Flip open a popular financial magazine. Browse its Web presence. Visit
More informationMANAGED FUTURES INDEX
MANAGED FUTURES INDEX COMMENTARY + STRATEGY FACTS JANUARY 2019 CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% AMFERI BARCLAY BTOP50 CTA INDEX S&P
More informationLarry and Kelly Example
Asset Allocation Plan Larry and Kelly Example Prepared by : Sample Advisor Financial Advisor January 04, 2010 Table Of Contents IMPORTANT DISCLOSURE INFORMATION 1-6 Results Comparison 7 Your Target Portfolio
More informationIncome Investing basics
Income Investing basics investment options that can offer income, growth, and diversification Key questions to consider: What are your income-oriented investment options? What is the role of income in
More informationJuly J.P. Morgan Structured Investments. The J.P. Morgan Efficiente Plus 5 Index (Net ER) Strategy Guide
July 2017 J.P. Morgan Structured Investments The J.P. Morgan Efficiente Plus 5 Index (Net ER) Strategy Guide Important Information The information contained in this document is for discussion purposes
More informationWealth Strategies. Asset Allocation: The Building Blocks of a Sound Investment Portfolio.
www.rfawealth.com Wealth Strategies Asset Allocation: The Building Blocks of a Sound Investment Portfolio Part 6 of 12 Asset Allocation WEALTH STRATEGIES Page 1 Asset Allocation At its most basic, Asset
More informationTower Square Investment Management LLC Strategic Aggressive
Product Type: Multi-Product Portfolio Headquarters: El Segundo, CA Total Staff: 15 Geography Focus: Global Year Founded: 2012 Investment Professionals: 12 Type of Portfolio: Balanced Total AUM: $1,422
More informationRBC Strategic Asset Allocation Models
Page 1 of 7 United States Traditional Fixed Income Only Last updated: March 218 Fixed Income Only The focus is capital preservation. The portfolio is only invested in fixed income asset classes. The investor
More informationMorgan Stanley Dynamic Balance Index
Morgan Stanley Dynamic Balance Index Return MORGAN STANLEY DYNAMIC BALANCE INDEX Morgan Stanley Dynamic Balance Index A rules-based index offering risk-controlled exposure to a broad range of asset classes
More informationAlphaSolutions Blended Bull/Calendar
AlphaSolutions Blended Bull/Calendar An investment model based on trending strategies coupled with market analytics for downside risk control with predetermined investment periods Portfolio Goals Primary:
More informationYour Asset Allocation: The Sound Stewardship Portfolio Construction Methodology Explained
Your Asset Allocation: The Sound Stewardship Portfolio Construction Methodology Explained Author: Dan Weeks, CFP At Sound Stewardship, we take a principled approach to investing. That means our investment
More information2015 MDRT Annual Meeting e Handout Material
2015 MDRT Annual Meeting e Handout Material Title: Speaker: Diversified to the CORE: A Better Starting Point Craig L. Israelsen, Ph.D. Presentation Date: Tuesday, June 16, 2015 3:30 5:00 p.m. The Million
More informationAn Economic Perspective on Dividends
2017 An Economic Perspective on Dividends Table of Contents Corporate Outlook... 1 2 Market Environment... 3 7 Payout Ratio... 8 9 Long-term View...10 12 Global View... 13 16 Active Management... 17 Risk
More informationPersonalized Investment Proposal
Personalized Investment Proposal Client: Mr. Moderate Conservative Prepared on: 11/13/2016 Advisor Name Financial Advisor Advisor Address Advisor City, St zip Advisor Phone Advisor@email.com ATIA Advisor:
More informationPortfolio Rebalancing:
Portfolio Rebalancing: A Guide For Institutional Investors May 2012 PREPARED BY Nat Kellogg, CFA Associate Director of Research Eric Przybylinski, CAIA Senior Research Analyst Abstract Failure to rebalance
More informationCash. Period Ending 06/30/2016 Period Ending 3/31/2016. Equity. Fixed Income. Other
Product Type: Multi-Product Portfolio Headquarters: Austin, TX Total Staff: 46 Geography Focus: Global Year Founded: 1996 Investment Professionals: 16 Type of Portfolio: Balanced Total AUM: $12,046 million
More informationFAS Monthly Economic & Market Update
FAS Monthly Economic & Market Update December 2016 As of Nov 30, 2016 Copyright 2016 Financial Advisory Service, Inc. 1 Contents Economic Conditions 3 Market Conditions 4 A Leg-Up for Active Management?.....
More information80% Equity / 2% Fixed Income / 16% Alternative / 2% Allocation Strategy
2018 80% Equity / 2% Fixed Income / 16% Alternative / 2% Allocation Strategy INVESTMENT OBJECTIVE: Designed to provide strong growth potential through strategies with the ability to adjust allocations
More informationWEALTH CARE KIT SM. Investment Planning. A website built by the National Endowment for Financial Education dedicated to your financial well-being.
WEALTH CARE KIT SM Investment Planning A website built by the dedicated to your financial well-being. Do you have long-term goals you re uncertain how to finance? Are you a saver or an investor? Have you
More informationMotif Capital Horizon Models: A robust asset allocation framework
Motif Capital Horizon Models: A robust asset allocation framework Executive Summary By some estimates, over 93% of the variation in a portfolio s returns can be attributed to the allocation to broad asset
More informationMorgan Stanley ETF-MAP 2 Index Information
Morgan Stanley ETF-MAP 2 Index Information Investing in instruments linked to the Morgan Stanley ETF-MAP 2 Index involves risks not associated with an investment in other instruments. See Risk Factors
More informationGuide to Managed Futures
Guide to Managed Futures Why Managed Futures? Potential Benefits of Managed Futures Historical Performance Managed futures have historically withstood a number of major market scenarios. In fact, over
More informationAiming at a Moving Target Managing inflation risk in target date funds
Aiming at a Moving Target Managing inflation risk in target date funds Executive Summary This research seeks to help plan sponsors expand their fiduciary understanding and knowledge in providing inflation
More informationPremise Capital 3rd Quarter Investment Commentary
Premise Capital 3rd Quarter Investment Commentary Premise Investors, Q3 2018 YTD Return Std Dev Return Std Dev BBgBarc US Agg Bond TR USD 0.02 2.84-1.60 3.40 BBgBarc US Treasury US TIPS TR USD -0.82 3.27-0.84
More informationInflation and Asset Performance: A Review of the Past 48 Years
Inflation and Asset Performance: A Review of the Past 48 Years Mar 1, 2018 / By Craig L. Israelsen, PhD This is a tale of two time periods: 24 years with high inflation and 24 with low inflation. We examine
More informationDo We Invest with Our Hearts or Minds? How Behavioral Finance Can Dramatically Affect Your Wealth
Do We Invest with Our Hearts or Minds? How Behavioral Finance Can Dramatically Affect Your Wealth PART ONE In the first part of a two-part series on how advisors can deliver value to their clients, George
More informationAlphaSolutions Multi-Sector Fixed Income Model
AlphaSolutions Multi-Sector Fixed Income Model A fixed income model based on trending and momentum strategies Portfolio Goals Primary: Seeks to invest in highranked sectors within the fixed income market
More informationAllocating to Liquid Alternatives
HIGHLIGHTS TO ORDER, EMAIL US info@equinoxfunds.com An investor should not expect to be compensated for taking on diversifiable risk, only for systematic or market risk. A useful analogy is that of a fire-fighter
More information20% 20% Conservative Moderate Balanced Growth Aggressive
The Global View Tactical Asset Allocation series offers five risk-based model portfolios specifically designed for the Retirement Account (PCRA), which is a self-directed brokerage account option offered
More informationDESIGNED FOR TODAY S AND TOMORROW S INVESTMENT CHALLENGES
DESIGNED FOR TODAY S AND TOMORROW S INVESTMENT CHALLENGES PRUDENTIAL REAL ASSETS FUND EFFECTIVE JUNE 11, 2018, THE FUND S NEW NAME WILL BE PGIM REAL ASSETS FUND. FUND SYMBOLS WILL NOT CHANGE. Potential
More informationBROAD COMMODITY INDEX
BROAD COMMODITY INDEX COMMENTARY + STRATEGY FACTS JULY 2018 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) -80.00% ABCERI S&P GSCI ER BCOMM
More informationMANAGED FUTURES INDEX
MANAGED FUTURES INDEX COMMENTARY + STRATEGY FACTS JUNE 2018 CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% AMFERI BARCLAY BTOP50 CTA INDEX S&P 500 S&P
More informationJ.P. Morgan Structured Investments
October 2009 J.P. Morgan Structured Investments The JPMorgan Efficiente (USD) Index Strategy Guide Important Information The information contained in this document is for discussion purposes only. Any
More informationMANAGED ACCOUNTS. Capital Directions. A guided approach to financial achievement
MANAGED ACCOUNTS Capital Directions A guided approach to financial achievement CAPITAL DIRECTIONS A UNIFIED MANAGED ACCOUNT THAT COMBINES FLEXIBILITY, SIMPLICITY, AND DISCIPLINE With a Capital Directions
More informationThe New Diversification Adding Alternative Investments
Interactive Brokers in conjunction with BlackRock presents: The New Diversification Adding Alternative Investments Mark Peterson Director BlackRock webinars@interactivebrokers.com www.ibkr.com/webinars
More informationRetirement Income Strategies
Retirement Income Strategies An Educational Resource From Solid Rock Wealth Management By Christopher Nolt, LUTCF Introduction Investing wisely for wealth accumulation is one thing, converting those investments
More informationDo we believe SMAs help boost after-tax returns?
FIDELITY PERSONALIZED PORTFOLIOS: Equity Separately Managed Accounts It s not what you earn it s what you keep. Is your portfolio primed for success? With Fidelity Personalized Portfolios, we think so.
More informationDiversification and Rebalancing. What the past 40 years have taught us
Diversification and Rebalancing What the past 40 years have taught us A timely look at two timeless strategies The events of 2008 and early 2009 caused many investors to question some long-held beliefs
More informationHow to Assess Real Exchange Rate Overvaluation
JANUARY 2018 INTERNATIONAL EQUITY WHITEPAPER How to Assess Real Exchange Rate Overvaluation Leila Heckman, Ph.D., Founder John Mullin, Ph.D., Chief Strategist For More Information (917) 386-6261 www.heckmanglobal.com
More informationTIME TARGETED EQUITY PORTFOLIOS
TIME TARGETED EQUITY PORTFOLIOS 1 3 Year 4 6 Year Equity 7 15 Year 15+ Year Global Diversification Exposure to a large number of securities around the world reduces the risk that any one stock or any one
More informationAsset Allocation in the 21 st Century
Asset Allocation in the 21 st Century Paul D. Kaplan, Ph.D., CFA Quantitative Research Director, Morningstar Europe, Ltd. 2012 Morningstar Europe, Inc. All rights reserved. Harry Markowitz and Mean-Variance
More informationDo Commodities Add Value to Portfolio Performance?
January 2018 Do Commodities Add Value Portfolio Performance? Nicholas Reynolds Assistant Vice President & Portfolio Manager Overview Te annual performance of commodities since 2011 has been negative (with
More informationINVEST IN SOMETHING REAL NOT FOR USE IN OHIO.
TM INVEST IN SOMETHING REAL NOT FOR USE IN OHIO. RISK FACTORS u Past performance is not a guarantee of future results. u Investing in real estate assets entails certain risks, including changes in: the
More informationInsights from Morningstar Investment Services. Market Volatility: A Guide to Riding the Waves
Insights from Morningstar Investment Services Market Volatility: A Guide to Riding the Waves If you ve invested for almost any length of time, you ve experienced at least one of those don t-look-at-your
More informationPlease refer to For more information regarding the index. July 2017
BNP Paribas Momentum Multi Asset 5 Index Please refer to http://momentum5index.bnpparibas.com For more information regarding the index July 07 Introducing the BNP Paribas Momentum Multi Asset 5 Index Index
More informationAlternative Investments: Incorporating a Turnkey Solution
Alternative Investments: Incorporating a Turnkey Solution December 12, 2016 by Brad Alford of Value Line Funds Executive Summary Alternative investments have been gaining wide acceptance in many investors
More informationst Quarter Review
US Large Cap US Mid Cap US Small Cap International Equity Emerging Markets Real Estate Precious Metals Inflation Cash 10-year Treasury Global Bonds Corporate Bonds High Yield Corp Bonds Intmd-Term Muni
More informationEquity Volatility and Covered Call Writing
December 2017 Equity Volatility and Covered Call Writing Executive Summary Amid uncertainty in the markets and investor desire for lower volatility, investors may want to consider a covered call strategy
More information