The expanded portfolio mixes potential for growth with additional diversification. In this portfolio, Large Cap provides stability, Mid Cap provides additional growth and US Equity provides geographic diversification.
- Mid Cap: While mid cap investments were already available to you as part of Diversified earlier, a specific allocation for mid-caps allows larger portfolios to benefit from their potential for higher growth. This, of course, comes with added volatility.
- US Equity: This is a means to diversify in another, uncorrelated, equity market; and gain the benefits of the appreciating dollar.
The right distribution of investments across sub-asset classes in the appropriate amounts creates a better risk-adjusted portfolio.
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