Multi-asset
Level 1 of the Russell investment approach
Different asset classes like stocks, property and bonds have different risk and return characteristics. That’s why it’s recommended that portfolios contain a range of asset classes so that risk can be spread across the different classes. This provides smoother overall portfolio returns over time. Investing in just one asset class may provide higher returns, but also exposes investors to much greater volatility or risk.
Asset Classes
| 20 Year Annualised Returns | 50 Year Annualised Returns | |||
|---|---|---|---|---|
| Return | Risk * | Return | Risk * | |
| Stocks | NA | NA | 10.4% | 16.50% |
| Bonds | NA | NA | 6.1% | 7.60% |
| 40% Stocks / 60% Bonds |
8.16% | 9.03% | 8.1% | 9.00% |
| 50% Stocks / 50% Bonds |
8.39% | 10.24% | 8.6% | 9.90% |
| 60% Stocks / 40% Bonds |
8.61% | 11.59% | 9.0% | 11.10% |
* Standard deviation
Source:
US Dollar Returns for Equity and Bond Portfolios. From Jan 1985 to Dec 2007
Bonds: Jan 1985 to Dec 1989 CG Govt Bond Index, Jan 1990 to Dec 2007 LB Global Agg Index
Equities: Jan 1985 to Dec 2007 MSCI World
