Global Integration in Asset Allocation Strategy for High-Net-Worth Clients

As the lead investment strategist at an internationally recognized asset management firm, you have been tasked with constructing a comprehensive asset allocation strategy for a high-net-worth individual (HNWI) whose wealth is derived from a mix of traditional and alternative assets. The client has expressed a keen interest in global integration within their investment approach to maximize diversification and potential returns while managing risk.

The client’s current portfolio consists of 50% US equities, 30% fixed income (including municipal and corporate bonds), and 20% in domestic real estate. However, the client is concerned about the low exposure to international markets and alternative global investment vehicles due to perceived risks associated with currency exposure, political instability, and different regulatory frameworks.

In your essay, outline a strategic asset allocation plan that incorporates a global perspective, detailing the specific asset classes you recommend, the rationale for including each class, the potential impact of currency fluctuations, and how you would address the client's concerns regarding risks associated with global investments. Additionally, discuss how global economic trends (such as interest rates, inflation, and geopolitical factors) may influence your asset allocation decisions over the long term.