What is Tactical Allocation?
Tactical Allocation A portfolio-management approach involving short- to medium-term adjustments to asset class weights, designed to exploit market opportunities or mitigate risks in response to changing market conditions, while remaining within the bounds of the strategic allocation and investment policy statement (CFA Institute, GIPS).
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Tactical Allocation” Used in Practice?
Tactical allocation allows portfolio managers to temporarily overweight or underweight asset classes in response to anticipated short-term market trends.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Tactical Allocation?
A portfolio-management approach involving short- to medium-term adjustments to asset class weights, designed to exploit market opportunities or mitigate risks in response to changing market conditions, while remaining within the bounds of the strategic allocation and investment policy statement (CFA Institute, GIPS).
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