Overview of Asset Allocation

Free CFA Level III: Private Wealth lesson in Asset Allocation. 34 min read, ~5,173 words.

Asset allocation explains the vast majority of portfolio return variability over time. Asset-only (MVO) ignores liabilities; surplus optimization, hedging/return-seeking, and integrated ALM do not. Goals-based allocation maps sub-portfolios to individual goals ranked by priority. Strategic = long-term policy; tactical = short-term deviation; dynamic = rules-based adjustment. Asset class specification requires...

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Example 1
Example 2
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overview

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