Asset Allocation Strategies
As per our clients need - we provide Strategic and Tactical asset allocation strategies.
Strategic Asset Allocation
This is a Portfolio Strategy that involves sticking to long-term asset allocation.
It is a portfolio strategy that involves setting target allocations for various asset classes, and periodically rebalancing the portfolio back to the original allocations when they deviate significantly from the initial settings due to differing returns from various assets. In strategic asset allocation, the target allocations depend on a number of factors – such as the investor’s risk tolerance, time horizon and investment objectives – and may change over time as these parameters change.
Tactical Asset Allocation
It’s a Portfolio Management Strategy that rebalances the percentage of assets held in various categories in order to take advantage of market pricing anomalies or strong market sectors.
The goal of a TAA strategy is to improve the risk-adjusted returns of investing.
This strategy allows creating extra value by taking advantage of certain situations in the marketplace.
Strategic asset allocation is compatible with a “buy and hold” strategy, as opposed to tactical asset allocation which is more suited to an active trading approach. Strategic and tactical asset allocation is based on modern portfolio theory, which emphasizes diversification in order to reduce risk and improve portfolio returns.