In 1986, an article was published in TheFinancial Analysts Journal that changed the investment world. Three researchers – Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower (collectively "BHB") – compared the performance of actively managed pension funds to the performance of index funds. They found that asset allocation choices, not individual security selection, accounted for more than 96% of the variation between active and indexed portfolios.

The research served as rocket fuel for a two-decade boom in asset allocation. Published at an opportune time in the investment industry's growth, BHB has been used by countless financial advisors to convince clients that asset allocation works over time.

Almost exactly 20 years later, another article was published by two researchers in the same publication. This article lays the groundwork for the next leap forward in asset allocation. It also appeared at a remarkable time, when industry innovations and economic/market cycles were creating new opportunities for managing risk, increasing returns, and expanding efficient frontiers.

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