Global Integrated Asset Allocation Strategy

You are a senior portfolio manager at a global investment firm overseeing a multi-billion dollar portfolio. One of your clients, a sovereign wealth fund, is looking to achieve diversification while maintaining optimal risk-adjusted returns. They are particularly concerned about recent geopolitical tensions, fluctuating currency rates, and evolving global economic conditions.

In this context, develop a comprehensive asset allocation strategy that integrates global assets. Your strategy should consider both strategic and tactical asset allocation approaches while addressing the unique characteristics of different asset classes such as equities, fixed income, real estate, and alternative investments. Additionally, discuss how you would incorporate risk management techniques and economic indicators into your asset allocation decision-making process.

Finally, provide your rationale for whether a global integrated approach or a more localized strategy would better suit the client's objectives.