The majority of a pension fund's return is explained by asset allocation.

Question

Quizplus · Accepted Answer

Asset allocation refers to the process of investing in different asset classes, such as equities, bonds, and alternative investments, in a way that seeks to achieve a particular investment objective while managing risk. Studies have shown that asset allocation has a greater impact on a portfolio's long-term performance than individual security selection or market timing. Therefore, it is true that the majority of a pension fund's return is explained by asset allocation.

The Majority of a Pension Fund's Return Is Explained by Asset