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The Callan Periodic Table of Investment Returns: (1997–2016)
Thank you Ted for posting the most recent Callan Periodic Table of Investment Returns. It comes with no great surprises, but it's a terrific tool that illustrates the relative performance differences of the major asset classes.
Blackrock offers a similar presentation with an added graph that summarizes cumulative returns over the same timeframe. That integrates the rocky up/down character of the data sets over time. Here is the Link to that useful presentation format:
These Period Tables are best characterized as checkerboard patterns. They surely reinforce the ancient Biblical wisdom that "the last shall be first, and the first last". These dramatic return swings seem purely random so forecasting them is an impossible task. This is one significant reason why portfolio diversification is a winning strategy over the long haul.
SC value and EM are in the top 3, 16/20 years. Not a surprise but that pattern has me wondering if I should boost my allocations to those two areas. I can get neither directly in my Federal TSP at work.
I am not sure how you have your portfolio allocated now. Do you know?
If not, perhaps you can perform an Instant Xray on it? If so, this will tell you what you have along with how much of it. I use this tool often to check my own asset allocation by investment sleeve, by investment area and for the portfolio as a whole.
For me, I hold both emerging markets and small cap funds in the growth area of my portfolio. The growth area of the portfolio accounts for about 30% of my overall equity allocation. In the growth area I have five investment sleeves. I have a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty sleeve and a spiff sleeve for special investment positions when I wish to overweight equities.
Each sleeve in the growth area ranges from 20% to 35% in assets held with the exception being the spiff sleeve that can hold form 0% to no more than 10%. The small/mid cap sleeve currently has about a 25% weighting. My emerging markets fund is held in the specialty sleeve. The specialty sleeve comprises about 35% of the growth area with my emerging market fund having about a 40% weighting within its sleeve. I also hold a private equity fund and infrustructure fund in this sleeve as well with about a 30% weighting in each of these funds. Within the past couple of months the specialty sleeve has been one of my top performing sleeves, last year it lagged. In the third and fourth quarters of last year my small/mid cap sleeve was a top performer while it lags so far this year.
In addition, I have other funds that contain some emerging market and small cap positions. So, I feel it really important to know what I have overall to better determine if I should be considering adding funds designed to overweight certain themes.
I believe, that the TSP has five investment options. U. S. Small Caps being one of them.
Xray will help you in this review process and perhaps the table will help in finding the themes you might wish to overweight.
@MikeM2, what I noticed is that EM is also in last place 7 times and bottom 2 an additional time. Each of those times the return was outright negative. It seems to be feast or famine and the long term record isn't looking very good right now. In my mind that suggests that I want to rebalance every year regardless of what my allocation is unless I thought I could time things, which I definitely don't. I believe in EM so I am also adding through AIPs but not in any significant way.
SC value also ends up close to the bottom a fair amount but its ratios of tops to bottoms is better and it's not as extreme as EM even when it is close to the top or bottom. The long term returns are very good and quite a few of the commentaries I read each quarter suggest active managers feel there isn't an abundance of values out there now. The contrarian would probably recommend against adding to your allocation now and that's mostly, not entirely, what I'm doing.
@Old_Skeet I have 10% devoted to EM through sfgix and Mathews Asia Growth and Income. I have 10% devoted to SC/Midcap mostly through TSP S fund. Not going to make big changes. I just might start adding more to scv and em outside of work accounts (ira/roth ira). DCA into IRAs so no big moves in a richly valued market. Thanks.
Comments
Thank you Ted for posting the most recent Callan Periodic Table of Investment Returns. It comes with no great surprises, but it's a terrific tool that illustrates the relative performance differences of the major asset classes.
Blackrock offers a similar presentation with an added graph that summarizes cumulative returns over the same timeframe. That integrates the rocky up/down character of the data sets over time. Here is the Link to that useful presentation format:
https://www.blackrock.com/investing/literature/investor-education/asset-class-returns-one-pager-va-us.pdf
These Period Tables are best characterized as checkerboard patterns. They surely reinforce the ancient Biblical wisdom that "the last shall be first, and the first last". These dramatic return swings seem purely random so forecasting them is an impossible task. This is one significant reason why portfolio diversification is a winning strategy over the long haul.
Best Wishes.
I am not sure how you have your portfolio allocated now. Do you know?
If not, perhaps you can perform an Instant Xray on it? If so, this will tell you what you have along with how much of it. I use this tool often to check my own asset allocation by investment sleeve, by investment area and for the portfolio as a whole.
For me, I hold both emerging markets and small cap funds in the growth area of my portfolio. The growth area of the portfolio accounts for about 30% of my overall equity allocation. In the growth area I have five investment sleeves. I have a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty sleeve and a spiff sleeve for special investment positions when I wish to overweight equities.
Each sleeve in the growth area ranges from 20% to 35% in assets held with the exception being the spiff sleeve that can hold form 0% to no more than 10%. The small/mid cap sleeve currently has about a 25% weighting. My emerging markets fund is held in the specialty sleeve. The specialty sleeve comprises about 35% of the growth area with my emerging market fund having about a 40% weighting within its sleeve. I also hold a private equity fund and infrustructure fund in this sleeve as well with about a 30% weighting in each of these funds. Within the past couple of months the specialty sleeve has been one of my top performing sleeves, last year it lagged. In the third and fourth quarters of last year my small/mid cap sleeve was a top performer while it lags so far this year.
In addition, I have other funds that contain some emerging market and small cap positions. So, I feel it really important to know what I have overall to better determine if I should be considering adding funds designed to overweight certain themes.
I believe, that the TSP has five investment options. U. S. Small Caps being one of them.
Xray will help you in this review process and perhaps the table will help in finding the themes you might wish to overweight.
Good luck,
Old_Skeet
SC value also ends up close to the bottom a fair amount but its ratios of tops to bottoms is better and it's not as extreme as EM even when it is close to the top or bottom. The long term returns are very good and quite a few of the commentaries I read each quarter suggest active managers feel there isn't an abundance of values out there now. The contrarian would probably recommend against adding to your allocation now and that's mostly, not entirely, what I'm doing.
Regards,
Ted
https://investment.prudential.com/util/common/get?file=1D065355D2CC360385257B7D00536F8A
Derf