Is your asset mix delivering the ideal return?

South African bonds compared to 58 percent now and 23 percent in South African equities compared to 12 percent now.

The same is clear for the low growth component asset allocation as the optimal asset mix consisting of 43 percent growth assets was also very different: 11 percent in global bonds compared to 5 percent, 9 percent in global equities compared to 13 percent now, 33 percent in South African bonds compared to 36 percent now and 9 percent in South African equities compared to 5 percent now, while the cash component remained roughly the same. The main test, however, is to see how the most effective optimal asset allocations stack up with funds with similar growth components.

I compared the total return indices (annually rebalanced) of the most effective optimal asset mixes for high-risk tolerance investors, medium-risk tolerance investors and low-risk tolerance investors with funds in the South African Multi-Asset High Equity, Medium Equity and Low Equity subcategories for the 3- and 5-year periods to the end of last year on a straight and risk-adjusted basis by using the data I used to double-check the Raging Bull Award results, and the Sharpe and Sortino ratios for risk-adjusted purposes.

Although not strictly comparable due to comparing “no load” returns (no costs taken into account) of the asset mixes with the net return numbers of the funds that all three optimal asset allocations would have produced top percentile performances.

“Don’t forget your history, nor your destiny.” – Bob Marley.