As approximately 90 percent of the variability of future investment return is determined by the asset allocation,* FEG dedicates considerable resources to our internally developed and verified asset allocation analysis. We recommend a globally diverse asset allocation, to include alternative investments where appropriate. The expected return from the asset allocation should support spending policies or liability assumptions and investment objectives.

*Gary P. Brinson, Brian D. Singer, and Gilbert L. Beebower, Determinants of Portfolio Peformance II: An Update, The Financial Analysts Journal, 47, 3 (1991).