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FINANCIAL MARKET COURSES

Strategic Asset Allocation

Strategic asset allocation refers to the long-term allocation of an investment portfolio to various asset classes based on an investor's goals and tolerance for risk. A portfolio's strategic asset allocation incorporates a base policy mix that should remain unchanged even when the market moves up or down.

 

This course looks at the strategic asset allocation decision, which is generally recognized as the most important decision in the investment process and the key determinant of portfolio performance. It describes in detail how investors can rebalance their portfolio and the various considerations around such rebalancing.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Explain the concept of strategic asset allocation and how it represents the most important decision in the investment process

    Describe the various approaches to rebalancing a portfolio and the considerations for investors when undertaking rebalancing

  • COURSE OUTLINE

    Topic 1: Overview of Strategic Asset Allocation

    The Strategic Asset Allocation Decision

    Asset Classes & Weightings

    Asset Allocation Ranges

    Role of Securities Analysis in Asset Allocation

    Topic 2: Portfolio Rebalancing

    Portfolio Drift

    Importance of Rebalancing

    Rebalancing Approaches

    o Buy-and-Hold

    o Constant-Mix

    o Constant Proportion Portfolio Insurance (CPPI)

    o Option-Based Portfolio Insurance (OBPI)

    Rebalancing Considerations

    o Investment Time Horizon

    o Timing

    o Characteristics of Portfolio Assets

    o Characteristics of Asset Markets

    o Costs

    Optimal Rebalancing Strategy

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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