The Importance of Asset Allocation

LONGER TERM INVESTMENT HORIZONS, STABLE ASSET ALLOCATIONS AND A SUCCESSFUL TRACK RECORD MEAN THE APPROACH OF INSTITUTIONAL AND SOME UNIVERSITY ENDOWMENT FUNDS SEEMS A PRUDENT APPROACH.

OUR APPROACH
Different strategies and asset classes should complement each other within a portfolio, so that positive returns may be derived from a variety of economic and market scenarios. Our approach aims to succeed across the economic cycle as different portfolio elements perform better than others at each stage of the cycle.

ACADEMIC STUDIES
Academic Studies have demonstrated how successful investment strategies require a sensible approach towards asset allocation. Asset allocation simply describes the spread of your investments across different asset classes, such as equities, fixed interest, property & cash. Effective asset allocation requires going beyond the principles of diversification. Just holding a number of diversified investments belonging to the same asset class will not necessarily demonstrate effective diversification.

GREATER DIVERSIFICATION
While a traditional portfolio might hold a combination of cash, stocks, bonds and international exposure, institutional portfolios may expand that mix to include alternative choices. The university endowment funds of Harvard and Yale have been leaders in diversified multi-asset class investing for over two decades. Through this approach to investing and their exposure to alternative asset classes they have consistently achieved double-digit annual returns with low risk and only moderate draw-downs.