Category

The Lot - Multi-asset class

Company

Investment Science

Research Paper

This paper argues that letting Strategic Asset Allocations dominate the return of portfolios severely restricts the flexibility of skilled portfolio managers to create diversified and optimal portfolios. Indeed, the restriction is so great that it is virtually impossible for active managers to add value after all fees are taken into account. The paper argues that active investors should not let their choice of the level of portfolio risk automatically determine the portfolio allocations, as is the case with Strategic Asset Allocation but rather that portfolio allocations should have regard for the risk and liquidity requirements of the investor but be flexible within wide but sensible boundary ranges.

Presentation

David Toohey, Chief Investment Officer, Investment Science Asset Management