Tactical Asset Allocation

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Tactical Asset Allocation (TAA)

Portfolio strategy that allows active departures from the normal asset mix according to specified objective measures of value. Often called active management. It involves forecasting asset returns, volatilities, and correlations. The forecasted variables may be functions of fundamental variables, economic variables, or even technical variables.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Tactical Asset Allocation

An active management strategy for a portfolio or fund with a basic set of securities. The money manager changes the securities represented in the portfolio or fund as needed in order to take advantage of short-term profits. However, once the portfolio or fund attains those profits, the money manager returns to the basic set of securities it originally contained. The money manager may use fundamental, technical, and/or macroeconomic analysis in determining when and how to change the securities in the portfolio or fund.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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But then the question arises: How is tactical asset allocation distinguished from a market-timing-based buy-sell strategy, which entails predicting future price movements?
More conservative investments 69% Guaranteed income features 65% income investments 46% Tactical asset allocation 44% Alternative investments 40% infiation protection 28% Tax-advantaged investments 22% Cash investments 21% Note: Table made form bar graph.
"Quiet Giant" BGI has $800 billion in assets while managing over 1,500 funds as the world's largest provider of indexing, tactical asset allocation, an quantitative active strategies.
Barclays Global Investors is the world's largest institutional investment manager, and the world's largest provider of structured investment strategies such as indexing, tactical asset allocation, and quantitative active strategies.
Given an optimal strategic asset allocation, the second lever is tactical asset allocation: the deviation from long-term asset allocation to capture medium-term market opportunities.
While tactical asset allocation strategies tend to underperform the market in rising markets, they significantly out perform the market when the market is falling, producing an overall net improvement over a complete market cycle.
UBS is reducing its size of the overweight position in global equities in our tactical asset allocation this month.
In addition, Lee has served on the advisory board of The Journal of Portfolio Management since 1997 and is the author of the book Theory and Methodology of Tactical Asset Allocation.
Hull Tactical Asset Allocation LLC and Exchange Traded Concepts LLC serves as the investment advisers and Vident Investment Advisory LLC serves as a sub adviser to the fund.
* 86% did not worry that automated advice would render the traditional, high-touch advisory model obsolete--they did not think robo-advisors could deliver the tactical asset allocation needed, particularly in down markets.
These investment approaches -- which include actively managed stock selection, dynamic or tactical asset allocation, and the use of alternative investments, among others -- are a core tool for the majority of advisors and investment managers.

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