Merrill Lynch Edge Select Aggressive Portfolio: ETF allocation and returns (2024)

FAQs

What is an example of an aggressive portfolio allocation? ›

For example, Portfolio A which has an asset allocation of 75% equities, 15% fixed income, and 10% commodities would be considered quite aggressive, since 85% of the portfolio is weighted to equities and commodities.

While quite a few personal finance pundits have suggested that a stock investor can expect a 12% annual return, when you incorporate the impact of volatility and inflation, 7% is a more accurate historical estimate for an aggressive investor (someone primarily invested in stocks), and 5% would be more appropriate for ...

Aggressive Growth ETFs are aimed at providing growth using aggressive tactics, meaning they have a high risk/reward profile. Click on the tabs below to see more information on Aggressive Growth ETFs, including historical performance, dividends, holdings, expense ratios, technical indicators, analysts reports and more.

The moderately conservative allocation is 25% large-cap stocks, 5% small-cap stocks, 10% international stocks, 50% bonds and 10% cash investments. The moderate allocation is 35% large-cap stocks, 10% small-cap stocks, 15% international stocks, 35% bonds and 5% cash investments.

A too-aggressive portfolio may scare you out of the market.

The secret to scoring big returns in the market is staying invested. So if a volatile portfolio scares you out of the market, you lose the key advantage of investing in stocks.

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

In the last 30 Years, the Merrill Lynch Edge Select Aggressive Portfolio obtained a 8.56% compound annual return, with a 13.26% standard deviation. It suffered a maximum drawdown of -45.65% that required 41 months to be recovered.

In your later years, a conservative allocation of 30% cash, 20% bonds and 50% stocks might be appropriate. Diversified portfolios typically include a core of at least 50% stocks in part because equities alone offer the potential to generate long-term returns exceeding inflation.

The common rule of asset allocation by age is that you should hold a percentage of stocks that is equal to 100 minus your age. So if you're 40, you should hold 60% of your portfolio in stocks. Since life expectancy is growing, changing that rule to 110 minus your age or 120 minus your age may be more appropriate.

The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.94B in assets. In the last trailing year, the best-performing Aggressive ETF was AOA at 16.32%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.

How much of my portfolio should be in ETFs? ›

"A newer investor with a modest portfolio may like the ease at which to acquire ETFs (trades like an equity) and the low-cost aspect of the investment. ETFs can provide an easy way to be diversified and as such, the investor may want to have 75% or more of the portfolio in ETFs."

Consider an aggressive investment example: A portfolio that is 80/20 would be considered aggressive as opposed to a portfolio that is 60/40, which would be considered conservative. An 80/20 portfolio invests 80% of the wealth in stocks and 20% in bonds. Whereas a 60/40 portfolio invests 60% in stocks and 40% in bonds.

An aggressive mutual fund will allocate up to 35% of its assets to debt and at least 65% to stocks. Because a large component of their portfolio consists of fixed-income assets, they are nevertheless entitled to profit from equity taxation under current tax legislation.