Catastrophe
Cash
U.S. IG fixed income
Commodities
Hedge funds
Managed futures
Income
U.S. IG bonds
U.S. high-yield fixed income
Int’l bonds (DM/EM)
Large- and mid-cap equity
DM equity
Real estate
Volatility
U.S. IG fixed income
DM fixed income
Hedge funds
Managed futures
Liquidity
Cash
U.S. IG fixed income
DM fixed income
Large-cap equity
DM equity
Inflation
TIPS or short-term fixed income
Domestic equity
Int’l equity (DM/EM)
Real estate
Commodities
Growth
U.S. high-yield fixed income
EM fixed income
U.S. equity
Int’l equity (DM/EM)
Real estate
Private Equity
Source: Wells Fargo Investment Institute, as of December 31, 2023. IG = investment grade. DM = developed markets. EM = emerging markets. TIPS = Treasury Inflation-Protected Securities. Hedge Funds, Managed Futures, Real Estate, and Private Equity funds are not appropriate for all investors and are only open to “accredited” or “qualified” investors within the meaning of U.S. securities laws. Equity, fixed income, foreign, cash alternatives, and alternative investments are materially different investments with materially different risk and reward characteristics. These risk and reward characteristics should be evaluated carefully before making any investment decision.
Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Bloomberg Commodity Index is comprised of 22 exchange-traded futures on physical commodities and represents 20 commodities weighted to account for economic significance and market liquidity. An index is unmanaged and not available for direct investment.
Key Takeaways
- Certain asset classes can be appropriate under different circumstances or for different investment objectives.
- Our research indicates that the top-performing asset classes when inflation is above average have been U.S. Mid Cap Equities and Commodities, represented by the Russell Midcap Index and Bloomberg Commodity Index, respectively.