Category: Asset Allocation
Asset Allocation: U.S. View
In this brief we offer a discussion on a practical method of how asset allocation can be used to satisfy an investor’s desire for stability and opportunity within an investment portfolio. It is our objective to create a solid basis for understanding changes in allocations when considering objectives, risks and market characteristics.
The brief starts with a global view and then continues to refine focus until the allocation is centered exclusively on domestic sectors. At the end of the brief, there is a special section where consideration is given to portfolios that are concentrated in a single specific industry and how an investor can adjust a portfolio to reduce the impact of concentration.
Portfolio: U.S. Sector Only: LargeCap
This allocation results in a market weight, or near market weight (<0.5 percentage point difference) condition for: Energy, Financials, Health Care, Industrials, Information Technology, Materials and Utilities. Overweight positions for: Consumer Staples, and Telecommunication Services. Underweight positions for: Consumer Discretionary.
Portfolio: Global Index
Financials reduced by 0.7 percentage points, Consumer Staples increased by 0.5 points, Telecomm increased by 0.3 points and Utilities reduced by 0.2 points.
Asset Allocation: U.S. View
Asset allocation adjustments will move assets to undervalued areas and away from overvalued areas based on the degree of over/under valuation. The further the distance current valuations are above fair value, the lower the allocation will be for the asset area from market neutral. The further distance current valuations are below fair value, the higher the allocation will be for the asset area from market neutral.
Asset Allocation Discussion (American View)
In this brief we offer a discussion on a practical method of how asset allocation can be used to satisfy an investor’s desire for stability and opportunity within an investment portfolio. It is our objective to create a solid basis for understanding changes in allocations when considering objectives, risks and market characteristics. The major sections start with a global view and then continue to refine focus until the allocation is centered exclusively on domestic sectors. At the end of the brief, there is a special section where consideration is given to portfolios that are concentrated in a single specific industry and how an investor can adjust a portfolio to reduce the impact of concentration.