Understanding Tactical Asset Allocation

Easy Asset Allocation Tactical Asset Allocation

As a portfolio manager at an investment firm, you are responsible for overseeing a multi-asset portfolio. You utilize Tactical Asset Allocation (TAA) to adjust the portfolio's risk exposure based on short-term market opportunities. Recently, you have observed an increase in interest rates and changing economic indicators. In your upcoming meeting, you need to explain your approach to TAA to your team.

Which of the following statements best describes the rationale behind using Tactical Asset Allocation?

TAA is primarily used to maintain steady investment exposure across various asset classes regardless of market conditions.

TAA involves making short-term deviations from strategic asset allocation based on expected shifts in market conditions.

TAA focuses solely on long-term investment trends without considering immediate market fluctuations.

Hint

Submitted6.4K

Correct4.6K

% Correct73%