Our asset allocation vector explained
The tactical asset allocation vector reflects the evolving investment environment by specifying adjustments relative to a portfolio’s benchmark weights as defined by the strategic asset allocation (SAA)
A positive view means we hold more than the benchmark allocation in an asset class or sub-asset class (overweight). A negative view means we hold less than the benchmark allocation (underweight).
The sum of the weights across all asset classes is zero – if you increase in one area you need to decrease in another. Overall, relative to our EUR balanced SAA we currently hold 4% less of the portfolio in fixed income and instead hold 4% more in equities.
The view of each asset class is made up of sub-asset class views. Although we are negative on fixed income overall (-4%), there are areas where we see potential, such as Asia high yield (+3%).
The specific numerical weights given here relate to a EUR balanced portfolio and can be adjusted for different profiles.