Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Thursday, July 1, 2010

YTD Performance-Blackrock Diversified Portfolio

In previous posts, we have looked at returns over the last 20 years for parts of the capital markets including international, growth, value, fixed income etc. as provided by Blackrock.

The value of the Blackrock data is it provides long term results, shows volatility explicitly, and illustrates the value of diversification.

The following table extends these results by showing year-to-date returns on the sectors of the diversified portfolio: Click to Enlarge.

The table shows the volatility of various sectors and the dampening influence on returns that results from diversification.

For the year-to-date period, the international sector has had the greatest underperformance at -13.14% followed by growth stocks at -7.71%. Bonds have played an heroic role achieving a return of +5.24%.

Overall, the portfolio is down -3.1% calculated as follows:

.3* 1.0524 + .11 * .8686 + .11 * .988 + .24 * .9229 + .24 * .9483 = .969 and

.968 - 1 = -.031

The returns are based on net asset value as reported by Morningstar.

To me, a benefit of simplifying and using exchange traded funds is the ability to easily track performance on an ongoing basis. Also, by playing with the numbers, it is easy to see the impact of altering the allocation by, say, moving 5% from international to bonds.

Disclaimer: the information here is intended solely for instructional purposes. Investors should consult an advisor or do their own research before investing. I hold some of the exchange traded funds mentioned.


  1. Hey Robert,

    When do you consider rebalancing? For me, I just buy the "laggards" each month to keep my allocation in line with the percentages I have set for myself. But if the markets do something crazy, and I end up with one allocation out by 20% or so, then I rebalance. What's your strategy?

  2. Hi Andrew,
    I typically look to rebalance on an ongoing basis whenever allocation gets 5% out of whack. Thus if 60% is targeted to stocks and it gets to 55 or 65 I seek to bring it back in line.
    In today's market I'm moving from fixed incme to international. Not easy to do but that's what it's about - as you know.
    Incidently I hold CSJ, LQD, and JNK in by bond portion.
    I report the above results because we have 20 years worth of performance data in the Blackrock periodic table of investments. I find looking at the 20 years performance data is a useful starting point in talking about risk tolerance with people.
    Thanks for the comment!

  3. I'm assuming when you purchased JNK, you also considered HYG. What factors did you use to choose one over the other?

  4. Hi Shawn,
    I didn't do a big analysis. To me they are pretty much interchangeable. JNK has a bit longer duration, lower expense ratio, and at the time I put it on was trading at a slightly lesser premium. Still, over the longer term I expect them them to perform comparably.
    Thanks for the question.