Does asset allocation still matter?

Incorporating some tactical asset management might help boost your portfolio performance. 

Diversification among asset classes, styles and sectors is still key and being a little tactical might help increase your overall performance.  Performance trends tend to reverse among asset classes and global markets all the time. 2016 was a big flip year for US Style boxes. (See chart below). US Large Cap Growth Stocks were the biggest out-performers in 2015 (up 7.71%) followed by huge under-performance in 2016 (up 1.79%).

Most of the small cap stock out-performance happened post-election given new growth expectations and possible corporate tax reform. Expectation of infrastructure spending, tax cuts and deregulation benefited financials, industrial and basic materials since the election. Healthcare was the only negative sector in 2016. Healthcare came under scrutiny during the election through talks about price fixing and healthcare reform.

asset-allocation-table

Source: Morningstar Style Box

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s