Bridge over ocean
22 July 2021 Multimedia

Practitioners' Insights: Rules-Based Asset Allocation

  1. Ashutosh Bhargava
  2. Shreenivas Kunte, CFA, CIPM

In investing, "diversification is the only free lunch.”

—Nobel laureate Harry Markowitz

Asset allocation has the greatest influence on the overall returns of a typical portfolio. While everyone understands and appreciates the merits of optimal asset allocation, most struggle to accomplish this in real life. Both investing and asset allocation have more to do with discipline and a strong emotional quotient than with knowledge and intelligence, which are useful but not as important. In a world in which forecasting is becoming incrementally challenging, a systemic asset allocation process offers tremendous value.

Rules-based asset allocation is a superior way to remove biases. A hybrid approach that combines variables from fundamental, macro, technical, and behavioural approaches can be a robust way to achieve desired superior risk-adjusted returns.

In this webinar, Ashutosh Bhargava discussed practical ways to approach systematic diversified asset allocation.

Learning outcomes:

  • Learn about static asset allocation versus dynamic asset allocation.
  • Understand asset allocation across various asset classes (including global diversification) and intra-asset classes.
  • Review rules-based asset allocation combining fundamental and technical variables.
  • Discuss the possibility of a multi-variable asset allocation technique combining macro, technical, and behavioural factors but without valuations or other fundamental factors.

This is the archived version of a live webinar that took place on 22 July 2021

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