Occasionally, companies find it necessary to concentrate the voting power of a company into
a specific class of stock, in which a certain set of people own the majority of shares.
Not exact matches
Instead
of buying a
specific asset
class like a company's
stock or a currency, futures and options contracts allow traders to profit from their bets on future prices and to hedge losses on what they already own.
One way to do that is by assembling a group
of individual funds or ETFs each
of which provides exposure to a
specific asset
class — large - company
stocks, small shares, government and corporate bonds, etc..
Although I don't recommend two - asset -
class portfolios such as that, this comparison is a good way to demonstrate the value
of including a
specific asset
class (in this case international small - cap value
stocks) into a portfolio.
According to 1990 Nobel Prize winner Harry Markowitz's «Modern Portfolio Theory», almost 92 %
of investment returns are the result
of how assets are allocated among different
classes, while only 2 % are due to the
specific stocks and bonds you choose to buy within each asset
class.