Asset allocation key to better returns

The vast majority of investment returns come from asset allocation rather than stock selection and i...

The vast majority of investment returns come from asset allocation rather than stock selection and investors must grasp this if they are to generate the best risk-adjusted returns. That was the message from UBS senior asset allocation strategist Michael Karagianis at the recent Investment Update Roadshow. Karagianis cited a survey of the US pension fund industry, which found 91.5% of returns are down to asset allocation, with just 4.6% attributed to security selection and 1.8% to market timing. Karagianis said a four-year period of high returns and low volatility has lulled many inves...