Adding real assets to a traditional 60% equity/40% fixed-income portfolio may reduce volatility and increase returns.

We believe that adding real assets to a traditional portfolio of stocks and bonds offers diversification benefits that may serve to reduce volatility and increase returns. We illustrate this view with an analysis that compares the historical returns and volatility of portfolios with varying allocation mixes of global equities, global fixed income and a blend of private and public real assets. The chart above shows how adding real assets to a traditional 60 equity/40 fixed-income portfolio may increase a portfolio’s return potential while decreasing its risk.

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Index Provider Disclosures

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Index Definitions

The MSCI World Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets.

The Bloomberg Barclays Global Aggregate Index is a market capitalization-weighted index comprising globally traded investment-grade bonds. The index includes government securities, mortgage-backed securities, asset-backed securities and corporate securities to simulate the universe of bonds in the market. The maturities of the bonds in the index are more than one year.

The Cambridge Associates Real Estate Index is an end-to-end calculation based on data compiled from real estate funds (including opportunistic and value-added real estate funds), including fully liquidated partnerships, formed beginning in 1986.

The Cambridge Associates Infrastructure Index represents a horizon calculation based on data compiled from infrastructure funds, including fully liquidated partnerships, formed beginning in 1993.
 

Definitions of Terms

Annualized Return is periodic returns rescaled to a period of one year.

Annualized Volatility is periodic volatility rescaled to a period of one year.