Strategic asset allocations are used for the following investment solutions:
When you invest clients’ assets with us, you have access to risk-matched optimised asset allocations. These are produced in accordance with Modern Portfolio Theory (MPT) and are reviewed on a quarterly basis.
The economic assumptions that underpin the financial models are verified by Willis Towers Watson. Their role is advisory and involves the production of a quarterly parameter review report.
The report examines the underlying assumptions used for the investment solutions listed above and, if required, recommends changes to them. Adjustments to these underlying assumptions may then result in changes to the asset allocations.
Whilst the theory and volatility targets underpinning these investment solutions are the same, the asset allocations for each may not be identical. Any variation will result from slight differences in the assumptions and how they are applied, for example:
It is important to remember that the assumptions used are based on a longer-term view and may not necessarily reflect short-term idiosyncrasies of the markets. More specifically, the report covers the following.
