Asset allocation: Agility tips

Ever wondered what to do with your portfolio allocation: leave it untouched through market ups and downs, or rebalance? When precisely? What’s the right balance? Our Quant research team has laid out the facts clearly for you in this study.

Facts you probably knew, now explained.

Maintaining a static domestic equity/ bond allocation over time is sub-optimal. No static allocation can offer good returns in all market phases or economic regimes. Portfolio construction must take into account the macroeconomic environment, the inflation regimes, the evolution of interest rates and cross-asset correlations.

Having said that, how to improve the risk/ return profile of your portfolio? Which asset class should you introduce according to the macroeconomic regime: international equities or bonds? Credit? Alternatives? Real assets? Value or growth stocks ? Which sector?

Based on historical data going back to 1950s, our research provides and asset allocation tips on how and when to adjust portfolio allocation in the aim of improving the return/ risk profile of your portfolio.

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