Do Index Funds Offer a False Sense of Diversification?

RELATED CONTENT

Portfolio Breadth: The Virtue of Being ‘Average’

Is average good enough? A well-allocated portfolio is diversified both in depth and breadth and, over the long run, will produce better, more consistent returns, as these comparison charts reveal.

Northwest Passage: Seeking Higher Returns With Lower Risk

An evaluation of 12 individual market indexes shows how they fared against a portfolio built on 12 asset classes equally weighted, in the context of risk and return from 2001 to 2015. Although the 12-asset model never outperformed the best asset class in any given year, it was shown to strike the optimal balance between higher returns and lower volatility.

How Long Is the ‘Long Run’?

Many investors understand the benefits of long-term investing over market timing, but exactly how long should you hold to generate a worthwhile return? Ten years? Thirty years? The answer may lie in reviewing how four major asset classes and a diversified portfolio performed over various rolling investment periods from 1926 to 2014.

Best Portfolio? Try Equal-Weighting With a High Dose of Asset Classes

A review of market performance over the past 15 years shows that a portfolio built on 12 asset classes equally weighted outperformed more traditional models from 2001 to 2015.