Strategic Asset Allocation
Definition
What is Strategic Asset Allocation?
A long-term target mix of asset classes based on an investorA person or organisation that commits capital with the expectation of a financial return.'s objectives and constraints.
Example in practice
How This Looks in Practice
A pension plan targets 50% bonds, 35% equities, 10% propertyLand and buildings held for use, rent, development, or capital appreciation., and 5% cash.
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Related Terms
Portfolio
The complete collection of investments owned by an investor or managed under one mandate.
Portfolio ConstructionPortfolio Construction
The process of selecting and combining investments to meet return, risk, liquidity, and time-horizon objectives.
Portfolio ConstructionTactical Asset Allocation
A temporary deviation from long-term asset weights to exploit perceived opportunities or manage risk.
Portfolio AnalyticsCorrelation
A statistic ranging from minus one to plus one that describes how two return series move together.