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12 Cards in this Set
- Front
- Back
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Strategic asset allocation
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Assets in a port over the LT are balanced and kept at an ASSIGNED balance
-Allocations are maintained to achieve the highest anticipated return vs risk |
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Tactical asset allocation
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Focuses on ST mix
-Adjustment are based on current mkt and economic conditions -IS a form of mkt timing |
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Active asset allocation
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Constantly rebalancing to obtain returns in EXCESS of a specific benchmark or expected return
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Growth investors
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Focus on companies w ABOVE AVG EARNINGS
-Growth stocks have high P/E(35 or higher) |
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Value investors
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Focus on stocks of UNDERVALUED companies with LOW P/E RATIOS
-Companies usuall pay reg dividends, low debt -High yield, low P/E stocks would provide income -Value inv look at fundamentals of the company |
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Passive asset allocation
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Portfolio is set and rebalnced at predetermined intervales
-returns are compared to specific benchmark |
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barbell portfolio
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Portfolio of BONDS with concentrations of ST and LT maturities
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Contingent immunization strategy
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Where a port manager has the opportunity to actively manage a port, but if the returns fall below a specific level,a ctive management ceases and immunization of the port occurs
-immunization takes place when: duration of asets = duration of liabilities |
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Indexing
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A PASSIVELY managed port
-inv may be allocated by mkt capitalization |
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Small Cap Capitalization
Large cap Capitalization |
Small cap:$300M- $1billion
Large cap:Over $5billion |
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When creating a CUSTOMIZED benchmark, the port manager must provide:
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Relevant and obtainable alternatives whic reflect the ports inv objectives
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Monte carlo simulation
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Creates a frequency distribution based on a wide range of POTENTIAL outcomes
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