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If there’s reason to worry about the global economy, it’s not obvious in asset prices these days. Positive momentum seems to have the upper hand, at least for the moment. The winners keep winning and the losers are trimming their losses.

October may have a dark history for markets, but you wouldn’t know it from looking at trading activity in recent weeks. There’s a clear bias to the upside of late. Leading the charge higher among the major asset classes (still) is our ETF proxy for US stocks (Vanguard Total Stock Market (NYSEARCA:VTI), which is higher so far this year by nearly 27%. On the opposite end is commodities, based on iPath DJ-UBS Commodity (NYSEARCA:DJP), which is lower this year by 9%.

For another perspective, consider the relative changes in the asset allocation of an equal-weighted portfolio of all the major asset classes this year. The chart below depicts the current portfolio composition (based on proxy ETFs) in context with the range of allocations year to date, based on a start date of Dec. 31, 2012 for the equal weights. The strategy for this illustration is equally weighting everything and letting the unmanaged allocations fluctuate freely through yesterday’s closing prices on October 22.

Turning to a review of how the individual markets have performed, the next chart shows the year-to-date results in relative terms through October 22 with all the ETF prices rebased to 100 as of Dec. 31, 2012:

(click to enlarge)

Next, here’s how an ETF-based version of a passive, market-value-weighted mix of all the major asset classes stacks up so far in 2013—the Global Market Index Fund, or GMI.F. This investable strategy benchmark is higher by nearly 12%, or roughly midway between the year-to-date returns for US stocks and bonds.

(click to enlarge)

In addition, consider how the Rebalancing Opportunity Index (ROI) for GMI.F has evolved. This benchmark, which uses the dispersion of returns as a measure of the fluctuating potential for enhancing return, lowering risk, or both via rebalancing, is currently just above a neutral reading. In other words, the potential for adding value with rebalancing looks relatively low compared with the 150-plus levels in May 2013. (Note: ROI's calculation in the chart below is based on rolling 1-year returns for each of the 14 ETF components in GMI.F--the "standard" view on these pages. Adjusting the historical window to reflect alternative time horizons and/or the asset mix will dispense different ROI values. For a brief overview of ROI, see this post.)

(click to enlarge)

Source: Asset Allocation And Rebalancing Review