Investment and Portfolio Analysis

Asset Allocation - Part 3



This eCourse consists of two modules on Asset Allocation. Module 1 focuses on Strategic asset allocation, which 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 module 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.

Module 2 covers Tactical Asset Allocation, which is an active portfolio management strategy that involves diverging from a portfolio's strategic asset allocation (long-term asset mix) to exploit short-term opportunities for making above-average returns and/or taking on lower downside risk on certain asset classes. The success of any approach to tactical asset allocation depends on the ability of the investor/portfolio manager to predict short-term market movements.

This module outlines the basics of tactical asset allocation, how TAA strategies are employed, and how they can add alpha to a portfolio.


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
- Describe the concept of tactical asset allocation and how it can be used to exploit short-term investment opportunities


Module 1: Strategic Asset Allocation
Topic 1: Overview of Strategic Asset Allocation
Topic 2: Portfolio Rebalancing

Module 2: Tactical Asset Allocation
Topic 1: Overview of Tactical Asset Allocation


SFC:2.00, PWMA:2.00