Another name for Portfolio Optimization.
A process by which the Asset Allocation of a fund is changed on a short-term basis to take advantage of perceived differences in relative values of the various asset class es. A variation of asset allocation around a benchmark. (See also Strategic Asset Allocation).
An approach where the weighting to different asset classes is changed frequently - up to several times per year - as a function of the expected performance from each asset class in the short run (see Market Timing).
Portfolio strategy that allows active departures from the normal asset mix according to specified objective measures of value. Often called active management.
shifting asset class exposure between stocks, bonds, and cash based on fundamental or technical analysis
Uses periodic assumptions about asset classes and the economy in general. The fund manager tries to improve portfolio performance by making "mid-course" changes in the long-term strategy based on near-term expectations.
An asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.
An investment approach by which the allocation of a fund to different classes of asset is changed on a short-term basis to take advantage of perceived differences in their relative values.
A short-term process which adjusts a fund’s asset allocation. It seeks to exploit perceived differences in comparable values of the various asset classes.
A portfolio strategy that involves taking advantage of market pricing anomalies or strong market sectors and following this, re-balancing the portfolio in order to maintain a long-term goal for asset allocation.
Where the asset allocation of a portfolio is changed on a short-term basis to take advantage of differences in the relative values of the various asset classes.
To sell asset classes that have strengthened and buy asset classes that have weakened in anticipation of the market returning to equilibrium.
The weightings (holdings) of each asset class and market relative to the benchmark. Used to produce superior returns over the chosen time period.
Tactical asset allocation is a method of investing in which investors modify their asset allocation according to the valuation of the markets in which they are invested. Thus, someone invested heavily in stocks might reduce his position when he perceives that other securities, such as bonds, are poised to outperform stocks. Unlike stock picking, in which the investor predicts which individual stocks will perform well, tactical asset allocation involves only judgments of the future return of complete markets or sectors.