Traditional funds can experience the roller coaster of market highs and lows
Markets can go up or down at any time, and traditional strategies have few tools to hedge against volatility.
UNPREDICTABLEIn the 16-year period shown, only twice did the same asset class lead the markets in consecutive years.
FRUSTRATINGNegative performance is not unusual. There were three years of negative returns on average for the indexes, excluding cash. Two indexes had negative results in seven years.
UNFAIRWhile the average return of these indexes over the 16 years shown was just over 5%, the average spread between the highest and lowest annual returns for each index was nearly 50%.
* Source: InvesTech Research. **Source: Standard & Poor's.
Absolute return investing pursues positive returns with modern tools to seek reduced volatility.
|Indexes in chart||Avg. annualized return
|U.S. large-cap stocks||9.92%|
|Global high-yield bonds||9.11%|
|U.S. corporate bonds||5.37%|
|U.S. bank loans||5.15%|
|U.S. mortgage securities||4.05%|
|U.S. government bonds||3.52%|