Oliver's Insights - Asset allocation isn't everything - but it nearly is
01 June 2010 - This note looks at the role of asset allocation in investment portfolios.
The key takeouts are:
- The perceived importance of asset allocation in driving investor returns faded during the 1990s as a result of high overall returns from most asset classes and relatively high correlations between bonds and shares.
- However, the dismal returns of the last decade from global shares, a relatively constrained overall return outlook, increasingly wild swings in share markets and the return of more volatile economic cycles is seeing the importance of asset allocation make a comeback.
