Asset Class Returns

Our “smartie box” shows the performance of the different asset classes ranked over various time periods. The one-year returns show just how variable the relative performance of asset classes can be from one year to the next. There are three key points arising from this table:

  1. Diversification: The Diversified portfolio comprises 20% exposure to each asset class and illustrates the effectiveness of not having all your eggs in one basket.
  2. Active asset allocation: No single asset class outperforms all the time – demonstrating how important it is to choose a fund manager with the skills and agility to move between asset classes.
  3. Equities for the long term: Although equities do go through periods of underperformance, investors are rewarded for this risk over the long term, as equities outperform inflation and “less risky” asset classes such as cash and bonds.

Click on the image below to print in PDF. To better understand the long-term behaviour of asset classes and gain perspective on shorter-term volatility, download the MacroSolutions Long-Term Perspectives 2018.