Asset Allocation
|
|
Asset Allocation is key to helping your clients achieve their financial goals.
Asset allocation strategically diversifies a portfolio among different asset classes, such as U.S. and foreign equities, bonds, cash equivalents, and real estate. Every investor has individual investing needs and objectives, so finding the right mix can be challenging.
However, in one simple step, our Asset Allocation Portfolios give your clients the opportunity to benefit from changing market cycles through a higher degree of diversification, and can help reduce overall portfolio risk. Each portfolio seeks to deliver a comprehensive investment strategy; automatic diversification and risk management; forward looking, quarterly tactical rebalancing; simplicity and efficiency.
What is the "Right" Mix?
Determining which mix of assets your clients hold in their portfolios is dependent on two things: their time horizon and risk tolerance.
Time Horizon1
Your clients' time horizon is the expected number of months or years they'll invest to achieve a particular financial goal. An investor with a longer time horizon may feel more comfortable taking on riskier, or more volatile, investments because they can tolerate the inevitable ups and downs of the markets. By contrast, an investor with a shorter time horizon would likely take on less risk.
Risk Tolerance1
Risk tolerance is the degree of uncertainty an investor can handle with regard to the value of their portfolio. An aggressive investor, or one with a high-risk tolerance, is more likely to risk losing money in order to get better results. A conservative investor, or one with a low-risk tolerance, tend to favor investments that will preserve their original investment.
This is a hypothetical illustration and is not based on actual historical or expected returns.
1Source: www.sec.gov
Benefit From Changing Market Cycles
As this hypothetical chart shows, investing in a portfolio diversified across the 10 asset classes represented below (investing 10% in each) could have provided your clients with an excess return of more than 47% of the return potential of the 3-month US Treasury Bill).
Source: Morningstar. Diversified Portfolio is comprised of investing 10% in each index below. Cash investments involve less risk than equity and fixed income investments. Treasury bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value.
US large-cap stocks are represented by the S&P 500 – The S&P 500 Index is the Standard & Poor’s 500 Composite Index of 500 stocks, an unmanaged index of common stock prices.
US large-cap value stocks are represented by the Russell 1000 Value – The Russell 1000 Value Index is an unmanaged market capitalization weighted index of the 1000 largest U.S. companies with lower-price-to-book ratios and lower forecasted growth values.
US large-cap growth stocks are represented by the Russell 1000 Growth – The Russell 1000 Growth Index is an unmanaged market capitalization weighted index of the 1000 largest U.S. companies with higher price-to-book ratios and higher forecasted growth values.
US small-cap value stocks are represented by the Russell 2000 Value – The Russell 2000 Value Index is an unmanaged index of common stock prices that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
US small-cap growth stocks are represented by the Russell 2000 Growth – The Russell 2000 Growth Index measures the performance of the small-cap growth stocks of the U.S. equity universe.
US mid-cap value stocks are represented by the Russell Midcap Value – The Russell Midcap Value Index is an unmanaged index of common stock prices that measures the performance of those Russell Midcap companies with lower price-tobook ratios and lower forecasted growth values.
US mid-cap growth stocks are represented by the Russell Midcap Growth – The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values.
International stocks are represented by the MSCI EAFE – The unmanaged MSCI EAFE Index (unhedged) is a market capitalization weighted composite of securities in 21 developed markets.
REITs are represented by the Dow Jones/Wilshire Real Estate Securities – The Dow Jones Wilshire Real Estate Securities Index is an unmanaged index of publicly traded REITs and real estate operating companies.
Bonds are represented by the Barclays Capital Aggregate Bond – The Barclays Capital Aggregate Bond Index represents an unmanaged diversified portfolio of fixed income securities, including U.S. Treasuries, investment-grade corporate bonds, and mortgage-backed and asset-backed securities.
It is not possible to invest directly in an unmanaged index.
Diversification does not protect against market risks, and does not assume a profit.
Investors cannot invest directly in indices.
The indices are unmanaged and the figures for the Index reflect the reinvestment of dividends, but do not include any deduction for fees, expenses or taxes. All indices are market capitalization weighted, except for the Wilshire REIT index and the Barclays Capital Aggregate Bond Index. It is not possible to invest directly in an unmanaged index. The figures for the index reflect the reinvestment of dividends but do not reflect the deduction of any taxes, fees or expenses which would reduce returns. Past performance does not guarantee future results.
Non-U.S. securities may be more volatile than U.S. securities, and small-capitalization stocks may be more volatile than stocks with larger capitalizations.
A Higher Degree of Diversification
Diversification spreads money across different investments, but Goldman Sachs Total Portfolio Solutions strategically diversifies investors' portfolios among different asset classes, such as U.S. and foreign equities, bonds, cash equivalents, commodities and other tangible investments.
What Differentiates Asset Allocation at Goldman Sachs?
Simplicity. A long-term investment strategy in one step.
As a financial advisor, you can help your clients access the same quantitative asset allocation models provided to Goldman Sachs’ institutional clients.
Strength. Historically consistent results generated by teams of experts.
Our global portfolio management team creates value through long-term strategic benchmark asset allocations, quarterly, global tactical allocation and security selection.
Solutions. To meet clients' specific goals.
We offer four Asset Allocation Portfolios to suit your client’s time horizon, address their investment objectives, and align with their individual tolerance for investment risk.
Goldman Sachs Asset Allocation Portfolios
Because every investor has different needs, we offer four risk-based Asset Allocation Portfolios—each designed with a specific goal, time horizon and risk tolerance in mind.
 |
|||||||
 |
 |
 |
 |
||||
|
40% Equity |
60% Equity |
80% Equity |
100% Equity |
||||
The portfolio ranges may change over time and the strategy ranges and investments in each underlying fund may be changed from time to time.
Asset Allocation Portfolios are subject to the underlying fund expenses as well as the expenses of the portfolio, and the cost of this type of investment may be higher than a mutual fund that only invests in stocks and bonds.
The Equity Growth Strategy Portfolio is expected to invest a relatively significant percentage of its assets in the Goldman Sachs Structured Large Cap Growth, Structured Large Cap Value, Structured Small Cap Equity and Structured International Equity Funds, and is subject to the risk factors of those funds. Some of those risk factors include the volatility of U.S. and non-U.S. equity investments; and the political, economic and currency risks of non-U.S. securities, which are particularly significant regarding equities of issuers located in emerging markets.
The Growth Strategy Portfolio is expected to invest a relatively significant percentage of its equity allocation in the Goldman Sachs Structured Large Cap Growth, Structured Large Cap Value, Structured Small Cap Equity and Structured International Equity Funds, and is subject to the risk factors of those funds. Some of those risk factors include the volatility of U.S. and non-U.S. equity investments; the credit risk and volatility of high yield bonds; and the political, economic and currency risks of non-U.S. securities.
The Growth and Income Strategy Portfolio is expected to invest a relatively significant percentage of its equity allocation in the Goldman Sachs Structured Large Cap Growth, Structured Large Cap Value, Structured Small Cap Equity and Structured International Equity Funds and will invest a relatively significant percentage of its assets in the Structured Fixed Income and Global Income Funds. The Portfolio is subject to the risk factors of those funds. Some of those risk factors include credit and interest rate risk, the price fluctuations of U.S. government securities in response to changes in interest rates; the credit risk and volatility of high-yield bonds; and the volatility of non-U.S. stocks and bonds and U.S. stocks.
The Balanced Strategy Portfolio is expected to invest a relatively significant percentage of its equity allocation in the Goldman Sachs Structured Large Cap Growth, Structured Large Cap Value, Structured Small Cap Equity and Structured International Equity Funds and may invest a relatively significant percentage of its assets in the Global Income and High Yield Funds. It is expected that the Portfolio will invest more than 25% of its assets in the Short Duration Government Fund. The Portfolio is subject to the risk factors of those funds. Some of those risk factors include credit and interest rate risk, the price fluctuations of U.S. government securities in response to changes in interest rates; the volatility of investments in the stock market; and currency, economic and political risks of non-U.S. investments.
Diversification does not protect against market risks, and does not assume a profit.
Past performance does not guarantee future results.
A summary prospectus, if available, or a Prospectus for the Fund containing more information may be obtained from your authorized dealer or from Goldman, Sachs & Co. by calling (retail - 1-800-526-7384) (institutional - 1-800-621-2550) for the Goldman Sachs Funds and (1-800-762-5035) for the Goldman Sachs Variable Insurance Trust Funds. Please consider a fund's objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. The summary prospectus, if available, and the Prospectus contains this and other information about the Fund.
The information and services provided on this Web site are intended for persons in the U.S. only. Non-U.S. persons are directed to our audience selection page.
Goldman, Sachs & Co. is the distributor of the Goldman Sachs Funds.
NOT FDIC-INSURED | May Lose Value | No Bank Guarantee