Implementing a Strategic Asset Allocation for a Diverse Fund

Sam is a portfolio manager overseeing a diversified investment fund. The fund's investment policy statement (IPS) emphasizes a strategic asset allocation that aims to balance risk and return over a long-term horizon. Sam is currently evaluating the implementation of the asset allocation strategy across various asset classes, including equities, fixed income, real estate, and alternative investments.

Given the following market conditions: the equity market is expected to experience moderate growth, interest rates are projected to rise over the next few years, and alternative investments have gained traction among institutional investors due to their low correlation with traditional asset classes.

Discuss the key considerations for Sam as he implements this strategic asset allocation. Highlight how he should approach the adjustments to the portfolio, considering the economic outlook and client constraints outlined in the IPS.