Understanding Tactical Asset Allocation

John is a portfolio manager responsible for a diversified fund. He believes the equity market is likely to experience high volatility in the upcoming months due to recent economic indicators and geopolitical tensions. To mitigate risks and potentially enhance returns, he considers altering the asset allocation in his portfolio through tactical asset allocation.

Tactical asset allocation involves actively adjusting the proportion of assets in a portfolio to take advantage of market timing or relative value opportunities. John is reviewing three potential strategies to engage in tactical asset allocation.