Traditional and Alternative Asset Classes Generate Long Run Real Returns
“Time – the length of time investments will be held and the period of time over which investment results will be measured and judged is the single most powerful factor in any investment program.”
–Charles D. Ellis, Winning the Losers Game
History has demonstrated that both traditional and alternative asset classes exhibit embedded returns in excess of cash, commonly referred to as the "risk premium". Any investor can capture this return simply by buying the asset class; a fund manager is not necessary.
While each asset class is likely to experience a negative return at some stage, over the medium to long term, both traditional and alternative asset classes generate a return above both cash and inflation. Time is one of the most powerful factors in any investment program: investors with longer time horizons have a higher probability of capturing the risk premium of each asset class.
Source: Bloomberg, Frontier Capital Management LLP. Performance based on index returns. Click here for more information. Returns in GBP.
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