Periodic Table of Investments

June 30, 2022

By jwest on June 30, 2022
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As the Periodic Table of Investments shows, one year’s best performing asset class can be the next year’s worst. We use this chart to remind our clients about the importance of diversification. Having a well-diversified allocation, as indicated by the white boxes, allows our clients to participate in those asset classes that are doing well, while cushioning the impact of those that might not be. Please download a high resolution PDF here.

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Periodic-Table-06-30-2022

Disclaimers

Table created by RMB Capital.  Sources of returns: FactSet, Bloomberg, Barclays Treasury Intermediate Index, Barclays U.S. Aggregate Index, Barclays U.S. Corporate High Yield, HFRI Fund of Funds Composite Index, S&P 500 Index, Russell 2000® Index, MSCI* EAFE Index, MSCI* EM Index, CPI Index, Dow UBS Commodity Index, Dow Jones U.S. Select REIT Index, Alerian MLP Index, RMB Asset Allocation Policy.  Asset Allocation represents RMB Capital’s total policy asset allocation return for the period of 2011 to 4Q2021 It is a blended index of 55% equity (MSCI* ACWI), 30% fixed income (Barclays Treasury Intermediate), 10% real assets (CPI) and 5% absolute return (HFRI Funds of Funds) and is rebalanced daily. Past performance is not indicative of future performance and there is a possibility of a loss. Annualized return and volatility  represent a period from 1/1/11 to 12/31/21. Data as of 12/31/21. Volatility is defined as a statistical measure of the dispersion of returns for the index. Please see disclosure below for table and index definitions. An investment cannot be made directly in an index. The index data assumes reinvestment of all income and does not bear fees, taxes or transaction costs. The types of securities held by the comparison index may be substantially different from the  types of securities held by your account.

Asset Class Table and Index Definitions:

  • Core Fixed Income (Core FI) is represented by the Bloomberg Barclays Aggregate Intermediate U.S. Treasury: The Barclays Intermediate U.S. Treasury Index measures performance of securities in the intermediate range of the U.S. Treasury Index. The U.S. Treasury Index represents public obligations of the U.S. Treasury with a remaining maturity of one year or more. Treasury bills, STRIPS, TIPS and other special issues of state and local government bonds are not included in the U.S. Treasury Index. Securities in the Intermediate U.S. Treasury Index must have a remaining maturity between 1 and 10 years. They must also be investment grade and have at least $250 million par amount outstanding.
  • Opportunistic Fixed Income (Opp FI) is represented by the Bloomberg Barclays U.S. Aggregate Index: The Bloomberg Barclays Capital U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Duration is roughly 5 years. The index is roughly 35% US Treasuries, 32% MBS / CMBS, 20% Corporate bonds, 6% Government related and 7% other types of bonds.  There are no TIPS in this index.
  • High Yield is represented by the Bloomberg Barclays High Yield Index:  The Barclays U.S. High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from emerging market countries are excluded, but Canadian and global bonds of issuers in non-emerging market countries are included. The index consists of both corporate and non-corporate sectors. The corporate sectors are industrial, utility and finance, which include both US. and non-U.S. corporations. The securities within the index must have at least one year to final maturity, must have at least $150 million par amount outstanding and must be rated as high-yield (BB+ or lower). They must also be fixed rate, dollar-denominated and non-convertible.
  • Inflation is represented by the CPI Index: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living; the CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
  • Large Cap U.S. Equities (Large Cap US) is represented by the S&P 500 Index:  The S&P 500 is widely regarded as the best single gauge of the United States equity market. It includes 500 leading companies in leading industries of the U.S. economy. The S&P 500 focuses on the large cap segment of the market and covers approximately 75% of U.S. equities.
  • Small Cap U.S. Equities (Small Cap US) is represented by the Russell 2000® Index:  The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. It includes approximately 2000 of the smallest U.S. equity securities in the Russell 3000 Index based on a combination of market capitalization and current index membership. The Russell 2000 Index represents approximately 10% of the total market capitalization of the Russell 3000 Index.
  • Developed Market Equities (DM Equity) is represented by the MSCI* EAFE (Net) Index:  The MSCI EAFE Index measures international equity performance. It comprises the MSCI country indices that represent developed markets outside of North America: Europe, Australasia and the Far East.
  • Emerging Market Equity (EM Equity) is represented by the MSCI* Emerging Markets (Net) Index:  The MSCI EM Index measures equity market performance in the global emerging markets universe. It covers over 2,700 securities in 21 markets that are currently classified as EM countries. The MSCI EM Index universe spans large, mid and small cap securities and can be segmented across all styles and sectors.
  • MSCI* ACWI Index: The MSCI ACWI Index, MSCI’s flagship global equity index, is designed to represent performance of the full opportunity set of large-and mid-cap stocks across 23 developed and 26 emerging markets.  It covers more than 3,000 constituents across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market.
  • Absolute Return (Abs. Return) is represented by the HFRI Fund of Funds Index: The HFRI Fund of Funds Composite Index is an equal-weighted index containing over 600 constituent funds. It only includes fund of funds. The equal-weighting of this index provides a more general picture of performance of the fund of funds industry, since any bias towards larger funds is reduced. The constituent funds can be either domestic or offshore, but they all report in US dollars. The funds within the index report net (of all fees) returns on a monthly basis and have at least $50 million under management, or have been actively trading for at least 12 months.
  • Commodities is represented by the Dow Jones UBS Commodity Index: The Dow Jones UBS Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single index. It is composed of commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange. The Dow Jones UBS Commodity Index serves as the individual benchmark for the Gold/Commodity basket.
  • Real Estate Investment Trusts (REITs) is represented by the Dow Jones U.S. Select REIT Index: The Dow Jones U.S. Select REIT Index tracks the performance of publicly traded REITs and REIT-like securities and is designed to serve as a proxy for direct real estate investment, in part by excluding companies whose performance may be driven by factors other than the value of real estate. The index is a subset of the Dow Jones U.S. Select Real Estate Securities Index, which represents equity real estate investment trusts and real estate operating companies traded in the U.S.
  • Master Limited Partnerships (MLPS) is represented by the Alerian MLP Index: The Alerian MLP Index is the leading gauge of energy Master Limited Partnerships (MLPs). The float-adjusted, capitalization-weighted index, whose constituents represent approximately 85% of total float-adjusted market capitalization, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).

The opinions and analyses expressed in this communication are based on RMB Capital Management, LLC’s research and professional experience, and are expressed as of the date of our mailing of this communication. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is it intended to speak to any future time periods. RMB Capital makes no warranty or representation, express or implied, nor does RMB Capital accept any liability, with respect to the information and data set forth herein, and RMB Capital specifically disclaims any duty to update any of the information and data contained in this communication. The information and data in this communication do not constitute legal, tax, accounting, investment, or other professional advice. 

*Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein.  The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products.  This  report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

This information is confidential and may not be reproduced or redistributed to any other party.

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