| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | YTD | ’07-’21 average |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Emg Mkt Equity 39.8% | Dev ex US Fixed Inc 11.4% | Emg Mkt Equity 79.0% | US Small Cap Equity 26.9% | Emg-Mkt Fixed Inc 8.5% | Emg Mkt Equity 18.6% | US Small Cap Equity 38.8% | US Large Cap Equity 13.7% | US Large Cap Equity 1.4% | US Small Cap Equity 21.3% | Emg Mkt Equity 37.8% | CPI 1.9% | US Large Cap Equity 31.5% | US Small Cap Equity 20.0% | US Large Cap Equity 28.7% | Commod 13.6% | US Large Cap Equity 10.7% |
| Commod 16.2% | Inv Grade Fixed Inc 5.2% | High Yield Fixed Inc 58.2% | US Mid Cap Equity 25.5% | Inv Grade Fixed Inc 7.8% | Emg-Mkt Fixed Inc 18.5% | US Mid Cap Equity 34.8% | US Mid Cap Equity 13.2% | Emg-Mkt Fixed Inc 1.2% | High Yield Fixed Inc 17.1% | Dev ex US Equity 25.6% | Cash Alternative 1.8% | US Mid Cap Equity 30.5% | Emg Mkt Equity 18.7% | Commod 27.1% | CPI 6.2% | US Mid Cap Equity 10.2% |
| Dev ex US Equity 11.6% | Cash Alternative 1.8% | US Mid Cap Equity 40.5% | Emg Mkt Equity 19.2% | Dev ex US Fixed Inc 5.9% | Dev ex US Equity 17.9% | US Large Cap Equity 32.4% | 60%,40% Portf 10.6% | 60%,40% Portf 1.2% | US Mid Cap Equity 13.8% | US Large Cap Equity 21.8% | Inv Grade Fixed Inc 0.0% | US Small Cap Equity 25.5% | US Large Cap Equity 18.4% | US Mid Cap Equity 22.6% | Cash Alternative 0.6% | US Small Cap Equity 8.7% |
| Dev ex US Fixed Inc 11.3% | CPI 0.1% | Dev ex US Equity 32.5% | Commod 16.8% | High Yield Fixed Inc 5.0% | US Mid Cap Equity 17.3% | Dev ex US Equity 23.3% | Mod Grwth Inc Portf 6.2% | CPI 0.7% | US Large Cap Equity 12.0% | US Mid Cap Equity 18.5% | Dev ex US Fixed Inc -1.7% | Dev ex US Equity 22.7% | US Mid Cap Equity 17.1% | 60% 40% Portf 16.0% | Hedge Funds -6.2% | 60% 40% Portf 8.4% |
| Hedge Funds 10.0% | Emg-Mkt Fixed Inc -10.9% | Emg-Mkt Fixed Inc 28.2% | High Yield Fixed Inc 15.1% | 60%,40% Portf 5.0% | US Small Cap Equity 16.3% | 60%,40% Portf 17.7% | Inv Grade Fixed Inc 6.0% | Inv Grade Fixed Inc 0.5% | Commod 11.8% | US Small Cap Equity 14.6% | High Yield Fixed Inc -2.1% | 60%,40% Portf 22.1% | 60%,40% Portf 15.4% | US Small Cap Equity 14.8% | Inv-Grade Fixed Inc -14.6% | High Yield Fixed Inc 7.1% |
| Mod Grwth Inc Portf 8.3% | Hedge Funds -19.0% | US Small Cap Equity 27.2% | US Large Cap Equity 15.1% | CPI 3.0% | US Large Cap Equity 16.0% | Mod Grwth Inc Portf 13.7% | Emg-Mkt Fixed Inc 5.5% | Cash Alternative 0.0% | Emg Mkt Equity 11.6% | Mod Grwth Inc Portf 14.4% | 60%,40% Portf -2.3% | Mod Grwth Inc Portf 19.5% | Mod Grwth Inc Portf 13.9% | Dev ex US Equity 11.8% | High Yield Fixed Inc -14.7% | Mod Grwth Inc Portf 6.8% |
| Inv Grade Fixed Inc 7.0% | 60%,40% Portf -21.6% | Mod Grwth Inc Portf 26.8% | Mod Grwth Inc Portf 14.0% | US Large Cap Equity 2.1% | High Yield Fixed Inc 15.8% | Hedge Funds 9.1% | US Small Cap Equity 4.9% | Dev ex US Equity -0.4% | Emg-Mkt Fixed Inc 10.2% | 60%,40% Portf 14.3% | US Large Cap Equity -4.4% | Emg Mkt Equity 18.9% | Hedge Funds 11.8% | Mod Grwth Inc Portf 10.7% | Mod Grwth Inc Portf -19.8% | Emg-Mkt Fixed Inc 6.0% |
| Emg-Mkt Fixed Inc 6.3% | Mod Grwth Inc Portf -24.9% | US Large Cap Equity 26.5% | 60%,40% Portf 12.2% | Mod Grwth Inc Portf 1.1% | Mod Grwth Inc Portf 12.5% | High Yield Fixed Inc 7.4% | Hedge Funds 3.0% | Hedge Funds -1.1% | Mod Grwth Inc Portf 9.0% | Dev ex US Fixed Inc 9.9% | Emg-Mkt Fixed Inc -4.6% | Emg-Mkt Fixed Inc 14.4% | Dev ex US Fixed Inc 10.5% | Hedge Funds 10.2% | 60% 40% Portf -20.1% | Emg Mkt Equity 4.8% |
| 60%,40% Portf 6.2% | High Yield Fixed Inc -26.2% | Hedge Funds 20.0% | Emg-Mkt Fixed Inc 12.0% | Cash Alternative 0.1% | 60%,40% Portf 11.4% | CPI 1.5% | High Yield Fixed Inc 2.5% | Mod Grwth Inc Portf -1.7% | 60%,40% Portf 8.2% | Emg-Mkt Fixed Inc 9.3% | Hedge Funds -4.7% | High Yield Fixed Inc 14.3% | Dev ex US Equity 8.3% | CPI 7.0% | Emg-Mkt Fixed Inc -22.2% | Hedge Funds 4.6% |
| US Mid Cap Equity 5.6% | US Small Cap Equity -33.8% | Commod 18.9% | Hedge Funds 10.2% | US Mid Cap Equity -1.5% | Hedge Funds 6.4% | Cash Alternative 0.0% | CPI 0.8% | US Mid Cap Equity -2.4% | Hedge Funds 5.4% | Hedge Funds 8.6% | Mod Grwth Inc Portf -4.9% | Hedge Funds 10.4% | Inv Grade Fixed Inc 7.5% | High Yield Fixed Inc 5.3% | US Large Cap Equity -23.9% | Dev ex US Equity 4.1% |
| US Large Cap Equity 5.5% | Commod -35.6% | 60%,40% Portf 18.5% | Dev ex US Equity 8.2% | US Small Cap Equity -4.2% | Inv Grade Fixed Inc 4.2% | Inv Grade Fixed Inc -2.0% | Cash Alternative 0.0% | US Small Cap Equity -4.4% | Inv Grade Fixed Inc 2.6% | High Yield Fixed Inc 7.5% | US Mid Cap Equity -9.1% | Inv Grade Fixed Inc 8.7% | High Yield Fixed Inc 7.1% | Cash Alternative 0.0% | US Mid Cap Equity -24.3% | Inv Grade Fixed Inc 4.1% |
| Cash Alternative 4.8% | US Large Cap Equity -37.0% | Inv Grade Fixed Inc 5.9% | Dev ex US Fixed Inc 6.8% | Hedge Funds -5.3% | CPI 1.7% | Emg Mkt Equity -2.3% | Emg Mkt Equity -1.8% | High Yield Fixed Inc -4.5% | CPI 2.1% | Inv Grade Fixed Inc 3.5% | US Small Cap Equity -11.0% | Commod 7.7% | Emg-Mkt Fixed Inc 5.9% | Emg-Mkt Fixed Inc -1.5% | US Small Cap Equity -25.1% | Dev ex US Fixed Inc 2.7% |
| CPI 4.1% | US Mid Cap Equity -41.5% | Dev ex US Fixed Inc 3.9% | Inv Grade Fixed Inc 6.5% | Dev ex US Equity -11.7% | Dev ex US Fixed Inc 0.8% | Dev ex US Fixed Inc -5.1% | Dev ex US Fixed Inc -2.5% | Dev ex US Fixed Inc -4.8% | Dev ex US Fixed Inc 1.9% | CPI 2.1 % | Commod -11.2% | Dev ex US Fixed Inc 5.2% | CPI 1.4% | Inv Grade Fixed Inc -1.5% | Dev ex US Equity -26.8% | CPI 2.2% |
| High Yield Fixed Inc 1.9% | Dev ex US Equity -43.1% | CPI 2.7% | CPI 1.5% | Commod -13.3% | Cash Alternative 0.1% | Emg-Mkt Fixed Inc -6.6% | Dev ex US Equity -4.5% | Emg Mkt Equity -14.6% | Dev ex US Equity 1.5% | Commod 1.7% | Dev ex US Equity -13.4% | CPI 2.3% | Cash Alternative 0.5% | Emg Mkt Equity -2.2% | Emg-Mkt Equity -26.9% | Cash Alternative 0.8% |
| US Small Cap Equity -1.6% | Emg Mkt Equity -53.2% | Cash Alternative 0.1% | Cash Alternative 0.1% | Emg Mkt Equity -18.2% | Commod -1.1% | Commod -9.5% | Commod -17.0% | Commod -24.7% | Cash Alternative 0.3% | Cash Alternative 0.8% | Emg Mkt Equity -14.2% | Cash Alternative 2.2% | Commod -3.1% | Dev ex US Fixed Inc -9.5% | Dev ex US Fixed Inc -27.0% | Commod -2.6% |
Data as of 9/30/2022
Risks
Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. Small- and mid-cap stocks are generally more volatile, subject to greater risks and are less liquid than large company stocks. Foreign investing has additional risks including currency, transaction, volatility and political and regulatory uncertainty. These risks are heightened in emerging markets. Bonds are subject to market, interest rate, price, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. High-yield fixed-income securities are considered speculative, involve greater risk of default, and tend to be more volatile than investment-grade fixed-income securities. Municipal bonds offer interest payments exempt from federal taxes, and potentially state and local income taxes and may be subject to the alternative minimum tax, and legislative and regulatory risk. Investing in commodities is not appropriate for all investors and may subject an investment to greater share price volatility than an investment in traditional equity or debt securities.
Alternative investments, such as hedge funds, are not appropriate for all investors and are only open to “accredited” or “qualified” investors within the meaning of the U.S. securities laws. They are speculative and involve a high degree of risk that is appropriate only for those investors who have the financial sophistication and expertise to evaluate the merits and risks of an investment in a fund and for which the fund does not represent a complete investment program. While investors may potentially benefit from the ability of alternative investments to potentially improve the risk-reward profiles of their portfolios, the investments themselves can carry significant risks. Hedge funds trade in diverse complex strategies that are affected in different ways and at different times by changing market conditions. Strategies may, at times, be out of market favor for considerable periods which can result in adverse consequences for the investor.
Definitions
Performance results for the MGI Liquid and 60/40 portfolios are hypothetical and for illustrative purposes only. Hypothetical results do not represent actual trading, and the results achieved do not represent the experience of any individual investor. In addition, hypothetical results do not reflect the impact of any fees, expenses, or taxes applicable to an actual investment. Unlike most asset-class Indexes, HFR index returns are net of all fees. The Indexes reflect the historical performance of the represented assets and assume the reinvestment of dividends and other distributions. An index is unmanaged and not available for direct investment. Hypothetical and past performance does not guarantee future results. Definitions of the Indexes and descriptions of the risks associated with investment in these asset classes are provided below.
60%/40% portfolio
60%/40% portfolio: 60% S&P 500 Index and 40% Bloomberg Barclays U.S. Aggregate Bond IndexModerate Growth and Income
Moderate Growth and Income: 2% Bloomberg U.S. Treasury Bills (1–3 Month) Index, 30% Bloomberg U.S. Aggregate Bond Index, 6% Bloomberg U.S. Corporate High Yield Bond Index, 5% JPM EMBI Global Index, 24% S&P 500 Index, 10% Russell Midcap Index, 6% Russell 2000 Index, 8% MSCI EAFE Index, 5% MSCI Emerging Markets Index, 4% Bloomberg Commodity Index.- Investment Grade Fixed Income: Bloomberg U.S. Aggregate Bond Index is composed of the Bloomberg U.S. Government/Credit Index and the Bloomberg U.S. Mortgage-Backed Securities Index and includes Treasury issues, agency issues, corporate bond issues, and mortgage-backed securities.
- High Yield Fixed Income: Bloomberg U.S. Corporate High Yield Bond Index covers the U.S.-dollar-denominated, non-investment-grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB= or below. Included issues must have at least one year until final maturity.
- Cash Alternatives/Treasury bills: Bloomberg U.S. Treasury Bill (1–3 Month) Index is representative of money markets.
- Commodities: Bloomberg Commodity Index is a broadly diversified index of commodity futures on 20 physical commodities, subdivided into energy, U.S. agriculture, livestock, precious metals, and industrial metals sectors. Commodity weights are derived in a manner that attempts to fairly represent the importance of a diversified group of commodities to the world economy.
- Hedge Funds: HFRI Fund Weighted Index is a fund-weighted (equal-weighted) index designed to measure the total returns (net of fees) of the approximately 2,000 hedge funds that comprise the index. Constituent funds must have either $50 million under management or a track record of greater than 12 months. Substrategies include: HFRI Event Driven, Distressed/Restructuring Index, and HFRI Event Driven (Total) Index.
- Developed Market Ex-U.S. Fixed Income: JP Morgan Global Ex U.S. Index (JPM GBI Global Ex-U.S.) is a total return, market-capitalization-weighted index, rebalanced monthly, consisting of the following countries: Australia, Germany, Spain, Belgium, Italy, Sweden, Canada, Japan, the United Kingdom, Denmark, the Netherlands, and France.
- Emerging Market Fixed Income: JPM EMBI Global Index is a U.S.-dollar-denominated, investible, market-cap-weighted index representing a broad universe of emerging market sovereign and quasi-sovereign debt. While products in the asset class have become more diverse, focusing on both local currency and corporate issuance, there is currently no widely accepted aggregate index reflecting the broader opportunity set available, although the asset class is evolving. By using the same index provider as the one used in the developed market bonds asset class, there is consistent categorization of countries among developed international bonds (ex. U.S.) and emerging market bonds.
- Developed Market Ex-U.S. Equities: MSCI EAFE Index (Europe, Australasia, Far East) Index is a free-float-adjusted market-capitalization-weighted index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
- Emerging Market Equities: MSCI Emerging Markets Index is a free-float-adjusted market-capitalization-weighted index designed to measure equity market performance of emerging markets.
- U.S. Small Cap Equities: Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
- U.S. Mid Cap Equities: Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000® Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index.
- U.S. Large Cap Equities: S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value.
- Inflation-CPI: IA SBBI U.S. Inflation Index is a custom unmanaged index designed to track the U.S. inflation rate.
While the HFRI Indexes are frequently used, they have limitations (some of which are typical of other widely used Indexes). These limitations include survivorship bias (the returns of the Indexes may not be representative of all the hedge funds in the universe because of the tendency of lower performing funds to leave the index); heterogeneity (not all hedge funds are alike or comparable to one another, and the index may not accurately reflect the performance of a described style); and limited data (many hedge funds do not report to Indexes, and, therefore, the index may omit funds, the inclusion of which might significantly affect the performance shown. The HFRI Indexes are based on information self‐reported by hedge fund managers that decide on their own, at any time, whether or not they want to provide, or continue to provide, information to HFR Asset Management, L.L.C. Results for funds that go out of business are included in the index until the date that they cease operations. Therefore, these Indexes may not be complete or accurate representations of the hedge fund universe, and may be biased in several ways. Returns of the underlying hedge funds are net of fees and are denominated in USD.
NOTE: The Moderate Growth and Income Liquid Portfolio represents a balanced portfolio. A balanced portfolio composed of a variety of asset classes typically does not exhibit the same level of volatility as an individual asset class. This helps to smooth out portfolio performance over time.
Sources: © 2022 – Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute. Average is calculated as geometric mean. Average is calculated as 15 years from 2007–2021. Portfolios are rebalanced quarterly. The Moderate Growth and Income Liquid and 60/40 portfolios are hypothetical. Hypothetical and past performance does not guarantee future results. An index is unmanaged and not available for direct investment. See “Index Definitions and Asset Class Risk Disclosures” link above for the definitions of the indexes that correlate to each asset class.
1. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.