What is Strategic Allocation?
Strategic Allocation The long-term portfolio-management practice of setting and maintaining a target mix of asset classes (e.g., equities, fixed income, cash, alternatives) in accordance with investment policy statements and client objectives, typically reviewed annually or when fundamental circumstances change (CFA Institute, GIPS).
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Strategic Allocation” Used in Practice?
Strategic allocation is designed to align the long-term portfolio structure with the investor’s return and risk objectives, rather than reacting to short-term market fluctuations.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Strategic Allocation?
The long-term portfolio-management practice of setting and maintaining a target mix of asset classes (e.g., equities, fixed income, cash, alternatives) in accordance with investment policy statements and client objectives, typically reviewed annually or when fundamental circumstances change (CFA Institute, GIPS).
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