2  Assets

Published

December 12, 2024

2.1 Introduction

TODO: What are the investments we can hold?

2.2 Asset classes

  • stocks: individual stocks, ETFs, mutual funds
  • bonds: treasuries, corporate bonds, municipal bonds
  • real estate, REITs
  • commodities, metals
  • cryptocurrency
  • collectables

2.3 US sectors

There are 11 sectors in the standard classification by MSCI, see Table 2.1.

Table 2.1: The 11 sectors in the standard classification by MSCI. Classification of super sectors by Morningstar Stock Sector Structure (2011), where C=Cyclical, D=Defensive, S=Sensitive. Market cap data is from this blog (2024).
# Sector Super Sector Market Cap [T$] Market Cap [%] Largest Co Co share [%] Vanguard ETF
1 Technology S 15.3 31.7 Microsoft 22.3 VGT
2 Financials C 6.1 12.7 Berkshire 12.9 VFH
3 Healthcare D 5.6 11.6 Eli Lilly 13.5 VHT
4 Discretionary C 4.9 10.2 Amazon 38.8 VCR
5 Communications S 4.6 9.5 Alphabet 25.8 VOX
6 Industrials S 3.9 8.1 GE Aerospace 4.7 VIS
7 Staples D 3.0 6.2 Walmart 14.7 VDC
8 Energy S 1.7 3.5 Exxon Mobil 30.9 VDE
9 Real estate C 1.1 2.3 Prologis 10.5 VNQ
10 Utilities D 1.0 2.1 NextEra 14.0 VPU
11 Materials C 1.0 2.1 Linde 21.4 VAW

2.4 Active vs passive

  • Brinson, G.P., Hood, L.R., & Beebower, G.L. (1986). Determinants of portfolio performance. 1
  • Brinson, G. P., Singer, B.D., & Beebower, G.L. (1991). Determinants of portfolio performance II: An update. 2
  • Hood, R.L. (2005). Determinants of portfolio performance: 20 years later. 3

1 Brinson, Hood, & Beebower (1986).

2 Brinson, Singer, & Beebower (1991).

3 Hood (2005).