Diversification may improve risk-adjusted returns

Sources: © 2022 – Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute. Data from April 1, 2002 to March 31, 2022. Performance for the Moderate Growth and Income Liquid (3AG) Portfolio is hypothetical and for illustrative purposes only. Index returns do not represent investment performance or the results of actual trading. Index returns reflect general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. Hypothetical and past performance does not guarantee future results. Standard deviation is a measure of the volatility of returns. The higher the standard deviation, the greater volatility has been. See “Index Definitions and Asset Class Risk Disclosures” link above for portfolio compositions, risks, and index definitions.

Diversification does not guarantee investment returns or eliminate risk of loss.

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Key Takeaways

  • Over time, a diversified portfolio has helped mitigate volatility during times of market uncertainty and smooth out returns.
  • Real assets and alternative investments can add an element of diversification to a traditional portfolio comprised of stocks and bonds.