The Callan Periodic Table of Investment Returns

The so called Periodic Table of Investment Returns, or Callan Chart, or Asset Allocation Quilt has been making the rounds lately as the final 2015 numbers become easily accessible. We noticed it most recently on Ben Carlson’s wonderful blog, and the general idea is to stack how asset classes have performed in relation to one another over the past 10 or 15 years, as you can see below.

A Wealth of Common Sense Performance Chart(Disclaimer: Past performance is not necessarily indicative of future results)

The idea is to teach you visually about diversification – with the eye hopefully able to see that no one asset class (color) is always at the top of bottom of the rankings. They move up and down in relation to one another, leading to the logic that you should essentially give up trying to pick which one will be best for your portfolio, and just invest a little in all of them. A strategy also known as diversification.

Now, that’s all fine and good – but there are a few issues with it from our standpoint. One, it somewhat confuses the term ‘asset class’, with 5 of the 10 “assets” listed actually just different parts of the equity asset class (small cap, mid cap, large cap, international, and emerging market equities).  Second, this chart doesn’t really give a feeling for the magnitude or depth of the performance. For instance, the 4th ranked asset class in 2008 (Mid Cap) was down -36%, while the 4th ranked in 2009 (REITs) was up 29%, despite their appearing equal in the rankings.  Finally, it’s missing some important asset classes, such as alternative investments – mainly hedge funds and managed futures.

So, we fixed it, adding managed futures and hedge funds, while attempting to display the magnitude of the performance in a better way. We also just updated the numbers we used the last time we took a look at this, which differ some from Ben Carlson’s source data, but not much.

AssetClasses_Timeline_2016_Callin Chart

Large Cap = S&P 500
Small Cap = Russell 2000
Intl Stocks = MSCI EAFE
Emerging Markets = MSCI Emerging Markets
REIT = FTSE NAREIT All Equity Index
HG Bond = Barclay’s U.S. Aggregate Bond Index
HY Bond =BoAML US High Yield Master II
Cash= 3 Month T Bill Rate
Managed Futures = SG CTA Index
AA = Asset Allocation Portfolio
(15% Large Cap, 15% Intl Stocks, 10% Small Cap, 10% Emerging Markets, 10%  REIT, 40% HG Bond)

But if you’re more of a traditionalist – here’s the classic ‘periodic table’ look with managed futures and hedge funds added in:

2016 Callin Chart Performance(Disclaimer: Past performance is not necessarily indicative of future results)

Enjoy!

Write a Comment

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.