Bird’s Eye View: The asset allocation myth

Ron Bird  |  Australian National University & Portfolio Construction Forum  |  05 February 2024

I was amazed when teaching the Investment Management Analyst Certificate course several years ago to learn that the class believed that 90% of a fund’s returns were due to its asset allocation. Shortly thereafter, I was totally flabbergasted to read the same mantra being expressed in an opinion piece written by a senior executive of one of the biggest financial houses in the world. When pointing out the dangers of extolling such a myth to said executive, I was told I was wrong as the financial house believed the mantra to be true.

So where did th...

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