Hybrids deliver returns comparable with equities over the long term with less volatility, which makes the risk-adjusted return and lack of correlation to equities an attractive characteristic in a diversified portfolio.
Tag Archives | diversification
To avoid retreating from making investment decisions during uncertainty, investors are compelled to rely on ‘rules of thumb’ to guide them in decision-making. Here are many of the more popular commonly-used rules.
An efficient diversified portfolio might include unfamiliar assets with short-term volatility. It’s important to focus on a comfort level to attain the long-term benefits of diversification in a portfolio.
The active v passive debate has deflected attention from a more important issue, a focus on managing to client goals. Plus active management has suffered relative to passive by the central bank-driven uplift of all assets.
Investors shouldn’t automatically assume the inclusion of bonds in a portfolio provides diversity against their equity exposure, as correlations can change in volatile markets.
At its core, successful investing is simple, but we have a knack of making it look complex. Here are five basic lessons that demonstrate key aspects of investing.
Alternative assets can enhance retirement portfolios through diversification, but their use requires skilled navigation and a willingness to compromise on liquidity to allow assets to realise their long-term potential.
Investing across many different managers may not deliver the expected portfolio diversification if managers invest in the same way. Watch for diversification redundancy.
When markets deliver lower returns, investors need to save more, learn about investments and stay the course to achieve their retirement goals. Diversification is an effective way to weather uncertain times.
An article written for the Australian Shareholders’ Association’s October 2016 edition of ‘Equity’ on SMSF use of global equities and the wide range of opportunities readily available.
Most investors accept the benefits of diversification, but it can be problematic for some successful people who have made money in one business. For most investors, diversification leads to happier outcomes.
Global small caps have outperformed large caps over the last 15 years, and offer sector and country diversity for Australian investors worthy of a small allocation in a portfolio, modelled at about 5%.
The latest Exchange Traded Funds Report highlights the growing popularity and demand for ETFs from investors and advisers. It also flags an opportunity for actively-managed exchange traded funds in the coming year.
Often with multi-manager funds, each manager acts autonomously, unaware of what the others are doing. Funds that adopt a centralised approach can eliminate unnecessary trades and reduce tax inefficiencies.
A quick and simple demonstration of how diversification reduces the volatility of returns, which should be of interest to investors concerned about capital preservation nearing retirement.
It’s a dilemma for fund managers to make divestment decisions on behalf of investors based on philosophical grounds. Does it reflect the investors’ beliefs and will it adversely impact returns?