2009 Table of Asset Class Returns
Feb 19th, 2010 by Tim
What a difference a year makes…
The 2009 Callan Periodic Table of Investment Returns was recently published. A link to the Periodic Table is here. BlackRock also publishes a table, which I prefer because the table includes a Diversified Portfolio. A link to the BlackRock 2009 table is here. You can also click on the thumbnail image below.
- Large Cap Core, AKA S&P 500 Index, swung from a -37% loss in 2008 to a 26.5% gain in 2009, while fixed income, AKA Aggregate Bond Index, provided a steady return of 5.2% in 2008 and 5.9% in 2009.
- The Diversified Portfolio is composed of 35% of the Barclays Capital US Aggregate Bond Index, 10% of the MSCI EAFE Index, 10% of the Russell 2000 Index, 22.5% of the Russell 1000 Growth Index and 22.5% of the Russell 1000 Value Index.
- It’s impossible to predict with any certainty which asset class will “win” in 2010. Where are all the pundits who predicted a 26.5% return for the S&P 500 in 2009?
- The Diversified Portfolio returned 20.8% in 209, or 78.5% of the S&P 500 all equity asset class.
The table is a pictorial view of the benefit of a diversified portfolio, which consistently provides relative returns in the middle of the pack. It’s important to own a mix of stocks, bonds, and cash, diversified across multiple asset classes to reduce the volatility of returns in a portfolio. You can see this by comparing the Diversified Portfolio returns to those of any single asset class over the years.