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CFA Level 3
Portfolio Management and Wealth Planning

Strategic Asset Allocation Adjustment for Volatile Markets

Very Hard Asset Allocation Strategic Asset Allocation

As a senior portfolio manager at Global Investments, you are responsible for the strategic asset allocation of a multi-strategy fund. Recently, you have analyzed the correlation of major asset classes over various market cycles and their historical performances. The fund's investment policy states that the target asset allocation should respond dynamically to changing market conditions while ensuring exposure to growth-oriented investments.

Currently, the portfolio has a strategic allocation of 60% equities, 30% fixed income, and 10% alternatives. Given your analysis, you believe that the economic outlook indicates potential market volatility in the next few years, leading you to reconsider the tactical shifts in the asset allocation.

Which of the following asset allocation adjustments would best align with the fund's investment policy while balancing both risk and opportunity for the upcoming market environment?

Hint

Submitted16.4K
Correct15.2K
% Correct92%