Weekend Reading – Asset Class Returns since 1970 & Trend Following Strategies
Weekend Reading is a collection of Investment Research and Lifestyle topics from all corners of the Web. We source the highest quality insights from Wall Street and Main Street that you may apply to your investment process. Unlike the rest of Bankeronwheels.com, this series is provided without additional guidance. As usual, everything is to be used at your own risk. Below is the type of content we shortlist:
On average, 90 percent of the variability of returns and 100 percent of the absolute level of return is explained by asset allocation.
Featured
ETF Fee Calculator (Banker on Wheels)
We created the ETF Fee Calculator as an interactive tool designed to help investors understand the impact of fees on their ETF investments. Users can input details about their ETFs, such as expense ratios and investment amounts, and the calculator will project the total cost over time, demonstrating how fees can erode potential returns. This tool is especially valuable for visualizing long-term investment outcomes.
Portfolio Construction
Asset Allocation
- Bond laddering delivers comparable gains as reinvesting bonds each year—with reduced volatility and less downside (Wall Street Journal)
- Fund industry’s asset mix offers encouraging sign (Vanguard)
- Liz Ann Sonders about how to rebalance your portfolio. (Ritholtz - 13 min)
- Why you should 'diversify your diversifiers. (Rogersplanning)
Vanguard’s approach to managing target-date funds (Vanguard)
Vanguard TDFs are constructed using fundamental investment principles to
offer the best opportunity of delivering clients’ desired retirement outcomes. Vanguard applies portfolio construction best practices that balance market, inflation, and longevity risks in an efficient and transparent manner over an investor’s life cycle.
Read more on Vanguard
UNDERSTAND FINANCIAL MARKETS
Visualizing the Growth of $100, by Asset Class (1970-2023) (Visual Capitalist,
Which major asset class has generated the strongest returns over the long run? How do the returns of investments like bonds and real estate actually stack up?
To put investment returns in perspective, this graphic shows the growth of $100 by asset class over the long term, based on data from Aswath Damodaran at NYU Stern.
Not only were U.S. stocks the top performing major asset class, they outpaced other investments by a wide margin. Consider how a $100 investment in corporate bonds would have grown to $7,775 over the period, or 65% lower than an investment in the S&P 500.
Read More on Visual Capitalist
HOW TO INVEST
Here are a few things I would’ve thought were hard for investors to believe simultaneously. I would’ve been wrong (AQR)
Here are a few things I would’ve thought were hard for investors to believe simultaneously. I would’ve been wrong…
1) International diversification stinks for U.S. investors…
2) Not owning the bad companies (however you define ESG) is making the world a better place…
3) Investing in privates makes us more patient, better investors because,
Read more on AQR
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Active Investing
FACTOR investing
Factors Olympics: Q1 2024 Performance (Finominal)
We present the performance of five well-known factors on an annual basis for the last 10 years. Specifically, we only present factors where academic research supports the existence of positive excess returns across market cycles and asset classes.
Read more on Finominal
- Andrew Beer on Trend Following & Return Stacking (Systematic Investor - 1 hr 15 Min)
- Corey Hoffstein responds to Andrew Beer's comments on Return Stakcing (Corey Hoffstien)
- Jack Forehand and Justin Carbonneau talk with Tobias Carlisle about the case for value investing. (Excess Returns - 1 hr 5 Min)
In today’s episode, Cliff & I start by talking about some quotes he may or may not have said in the past. Then we kick around a bunch of topics. We talk about diversifying by both asset class and geography, the challenge of managing short-term expectations while keeping a long-term perspective, and how AQR is implementing AI and machine learning in their investment process.
discretionary investing
ALTERNATIVE ASSET CLASSES
How alternatives can diversify a portfolio (Morningstar)
Not all alternatives offer the same diversification benefits—and even when correlations look high, the degree of market sensitivity makes a big difference here. In our recently published 2024 Diversification Landscape report, Amy Arnott, Christine Benz, and I took a deep dive into how different asset classes performed in the past couple of years.
Read more on Morningstar
WALL STREET
Visa Inc. - World’s Largest Credit Card Company | A Finance Documentary (FinAIus - 39 Min)
Meet The King of Credit Cards – the world’s largest credit card company! This is the story of Visa’s ascent to global dominance in the financial world. Exploring its origins, innovations, and controversies, we will have an insightful look into the power dynamics and challenges within the credit card industry, highlighting Visa’s unparalleled influence and impact.
SUSTAINABLE investing
BAD BETS
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ETFs
UCITS ETFS
Cheapest UCITS Small Cap ETF: Invesco cuts fees on four ETFs (ETF Stream)
Invesco has slashed the fees of four equity and bond ETFs including its $65m Russell 2000 ETF as it looks to boost demand. The US giant reduced the fees on the Invesco Russell 2000 UCITS ETF (RTYS) from 0.45% to 0.25%, making it Europe’s lowest cost ETF to track the US small-cap index, undercutting rivals State Street Global Advisors (SSGA), DWS and Amundi.
Read more on ETF Stream
New UCITS ETF launches
| # | ETF | TER | ISIN |
|---|---|---|---|
| 1 | Amundi Prime All Country World UCITS ETF | 0.07% | IE0009HF1MK9 |
| 2 | Xtrackers MSCI World ex USA UCITS ETF 1C | 0,16% | IE0006WW1TQ4 |
| 3 | AMUNDI PRIME USA UCITS ETF Acc | 0,05% | IE000FSN19U2 |
| 4 | AMUNDI PRIME USA UCITS ETF Dist | TBC | IE000IEGVMH6 |
Overview of the US and European ETF markets by leading Issuers. (ETFBook)
ETF Book Provided an updated overview of the US and European ETF markets by leading Issuers. US ETF market: AUM $7.96 trillion – European ETF market: AUM $1.81 trillion. iShares is leading in the US, but Vanguard is closing the gap. In Europe, iShares is much more dominant.
US ETFs
BlackRock is set to launch ten ETFs focused on Treasury inflation-protected securities (TIPS). Ranging in maturity from 2024 to 2033, these ETFs will seek to provide inflation protection to investors concerned with erosion of purchasing power. The new TIPS-defined maturity bond ETFs will carry an expense ratio of 0.1%. [ETF.com]
Wealth Management
Personal Finance
- Daniel Crosby talks with Thomas Malthar about the differences between financial well-being and financial independence. (Standard Deviation - 52 min)
- Side hustles, making FI possible, frugality, giving yourself freedom, and side hustles. (ChooseFi - 40 min)
- Forbes just released its 2024 global billionaires list (Forbes)
- Brett McKay talks with Jake Knapp about creating a 'distraction-free' phone. (Art of Manliness)
Brokers
Freetrade Review – An ETF-Friendly Platform (Banker on Wheels)
Freetrade markets itself as an ETF-friendly platform with very competitive pricing for SIPPs and General accounts. It caters well to investors who want a simple portfolio as well as investors that may be interested in trading on European and U.S. exchanges. More advanced investors may find limitations depending on their sophistication and needs.
Early Retirement
Personal Development
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
Health & Wellness
CAREERS & Entrepreneurship
Average Wages Across Europe (Visual Capitalist)
Much and more has been written about the best countries in Europe to visit, sight-see at, or vacation in.
But the economic powerhouse of a continent also has eight of the top 20 largest economies, the biggest single-market area, and some of the richest countries in the world.
How does all of that translate into how much people earn across the continent?
We visualize the average hourly salary (in euros), across Europe in a heatmap. The bluer the hue, the higher the hourly salary. Data for this visualization comes from Eurostat and is current up to 2023.
Read more on Visual Capitalist
DESIGN YOUR LIFESTYLE
Travel
The Ebb and Flow of the Baja Divide (Bikepacking.com)
Tech & Economy
economy
- The World’s Top Flight Routes, by Revenue (Visual Capitalist)
- With a rate hike in the books, is Japan's economy finally normalizing? (FT, click on the first link)
- Why Bangladesh Won't Be The Next China (Economics Explained - 13 min)
- How India Can Win China's Growth Crown (Bloomberg - 8 min)
- Why a Former Freight Broker Is Making a Major Bet on Mexico (Oddlots - 41 min)
TECH AND SCIENCE
From Bankeronwheels.com
Get Wise The Most Relevant Independent Weekly Insights For Individual Investors In Europe & the UK
Liked the quality of our guides? There is more. Every week we release new guides, tools and compile the best insights from all corners of the web related to investing, early retirement & lifestyle along with exclusive articles, and way more. Probably the best newsletter for Individual Investors in Europe and the UK. Try it. Feel free to unsubscribe at any time.
🎁 In the first email, you can download a FREE comprehensive 2-page checklist to construct & monitor your portfolio and clean up your personal finances.
And finally
Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
Weekend Reading – BlackRock Launches New iBonds, Truth About €1M Broker Insurance & BOW is 4 years old!
The Truth About €1 Million Broker Guarantees
Three Sustainable Investing Strategies That Actually Work
ETF Fees – How They Work & How to Minimise Them!
How Much Should You Pay For An ETF?
4 Things I Learned In 4 Years Of Running A Finance Blog
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