AS Insights
Allocation Strategy
Optimal Asset Allocation
We work with clients to provide a tailored understanding of risk and return trade-offs for investors to create optimal portfolios.
Allocation Strategy
Optimal Asset Allocation
Asset allocation is inherently complex, especially for long-term investors. Our simulation-based asset allocation approach, which is part of our ASAMM toolkit, is specifically designed to capture the complexity of markets and returns over the long-term. The simulation approach uniquely integrates macroeconomic variables alongside asset prices, allowing for intuitive interpretation of returns and risk, and avoiding black box analysis.
We work with clients to explore trade-offs between return and risk that are tailored to their specific circumstances, from which they can test strategies, understand risks, and create optimal long-term portfolios.
Long-term Asset Allocation
Long-term asset allocation, connected to macro
Our asset allocation model integrates global macro and asset prices alongside explicit modelling of investor’s objectives, constraints and characteristics.
We explore asset allocation alternatives by simulating a large number of alternative paths for macro and asset markets. Investors can test any asset allocation and rebalancing strategy and impose their views on how markets will evolve going forward.
A key distinguishing feature of the simulation model is an accurate representation of macro risk, including capturing macro regimes. Our offering is uniquely able to generate macro-driven asset prices, where yield curves, equities, FX and all other asset classes embed realistic macro expectations across short and horizons.
AS Optimal Asset Allocation
Advanced asset allocation modelling combining macro dynamics, markets and investor objectives
Macro Dynamics
United States
Macro Expectations
Real Output Growth
t+1
t+2
...
Inflation
t+1
t+2
...
Monetary Policy
t+1
t+2
...
Euro zone
Real Output Growth
t+1
t+2
...
Inflation
t+1
t+2
...
Monetary Policy
t+1
t+2
...
Other Economies +++
Financial Markets
Equities
Markets, Sectors, and Segments
Government Bonds
Treasuries, Inflation-linked, Government-related
Corporate Bonds
Currencies
Commodities
Private Assets
Private Equity, Real Estate, Private Debt
Investor Characteristics, Objectives and Constraints
Income Sources
Spending Commitments
Non-Portfolio Assets
Long vs. Short Term
Capital Preservation
Risk Tolerance
Strategic Asset Allocation
Full Flexibility
We provide a realistic laboratory for investors to test asset allocation strategies
- Investor-specific: modelling of objectives and constraints, and tailored measures of risk, from which optimal asset allocation is built.
- Forward-looking: macro scenarios and alternative market assumptions for stress-testing portfolios.
- Full visibility: of key market drivers and avoiding ‘black-box’ optimisation.
- Full alignment: with our Capital Market Assumptions, with a model calibration that matches current market pricing and the macro outlook.
- Simulated paths: for any horizon delivered efficiently via API.
Related Content
Articles and insights related to our asset allocation solutions.
