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Friday, July 1, 2011

2011 Year-to-Date Performance - BlackRock Standard Diversified Portfolio

One of the most useful research pieces available for DIY investors, I believe, is the "Asset Class Returns: A 20-Year Snapshot" table produced by BlackRock and discussed at Cedar Financial Advisors.  It shows annual asset class returns, color-coded, on a ranked basis so that investors can easily see the best-performing and worst-performing sectors for each year.

Similar so-called periodic tables of investment returns (just looking at it brings back memories of high school chemistry!) are produced by others, but what makes the BlackRock table unique is its inclusion of a diversified portfolio. The diversified portfolio is an excellent benchmark for many DIY investors. It is comprised of low-cost, indexed exchange traded funds, as shown below. The 20-year annualized return of the portfolio was 8.89% for the 20-year period ended 12/31/2010.

The table shows how the return of the diversified portfolio has been much less volatile than individual sectors. The table also shows the futility of predicting sector performance - the best-performing sectors many times are the worst-performing sectors in ensuing years, Overall,  the table is an excellent starting point for the all important subject of risk management and asset allocation.

The updated performance of the components of the BlackRock Standard Diversified Portfolio over the first 6 months of calendar year 2011 is shown  in  the table:  CLICK TO ENLARGE

Source: Returns from Morningstar

The overall portfolio has achieved a return of 4.83% over the first 6 months of 2011, at an expense of approximately 0.11%.

Disclosure:  The data shown here is for educational purposes only. No recommendations are made. Individual investors should do their own research and/or consult with a professional advisor. Although data has been obtained from reliable sources, its accuracy cannot be guaranteed. I am not affiliated with BlackRock or Morningstar.


  1. "The 20-year annualized return of the portfolio was 8.89%"

    Wow! That is excellent! And a 0.11% ER is very competitive (Though I think the ER might've been higher back then and have come down in the last few years).

    Another thumbs up for diversified portfolios!

  2. I agree...very impressive, especially considering all the craziness that occurred over the period. Much of the performance is due to the first 10 years and the internet bubble.