CFA Level 3
Portfolio Management and Wealth Planning

Understanding Tactical Asset Allocation Objectives

Easy Asset Allocation Tactical Asset Allocation

James is a portfolio manager who employs Tactical Asset Allocation (TAA) strategies to enhance his clients' portfolios based on short-term market predictions. He recently analyzed the current economic indicators and is contemplating an increase in the equity allocation at the expense of fixed income assets due to expected growth in the equity markets. However, he must also consider the risks associated with such a move. Which of the following best describes the primary objective of Tactical Asset Allocation as it pertains to James's decision?

Hint

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