asset-allocation
Asset Allocation
Purpose
Provides frameworks for determining how to distribute capital across asset classes and strategies. Covers strategic and tactical allocation, mean-variance optimization, Black-Litterman, risk parity, glide paths, and practical implementation approaches. Asset allocation is the primary driver of long-term portfolio performance and risk.
Layer
4 — Portfolio Construction
Direction
both
When to Use
- Setting long-term strategic asset allocation targets
- Making tactical allocation decisions based on market views
- Running mean-variance optimization with constraints
- Implementing Black-Litterman to blend market equilibrium with investor views
- Building risk parity or equal risk contribution portfolios
- Designing glide paths for target-date or lifecycle strategies
- Evaluating core-satellite portfolio structures
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