The Strategic Asset Allocation methodology helps institutional investors to thoroughly answer key questions regarding long-term capital investment:
- What share ratio is appropriate for my portfolio?
- What does my optimal stock portfolio look like?
- Which duration best suits my retirement portfolio?
- What is my optimal rating or credit allocation?
- How many alternative assets can my portfolio allocate?
- What is the optimal ratio between direct investment and special funds?
- Is my portfolio crisis-resistant?
- Does my portfolio generate the necessary or desired cash flows?
- Is my risk-return ratio optimal?
Answering these questions requires a thorough, transparent, and pragmatic approach, where every decision step is understandable and plausible.
It is not about optimizing individual risk or return metrics, but maximizing the probability that the defined investment goals will be achieved.
Strategic asset allocation forms the foundation of a long-term, robust investment. It significantly determines the risk-return profile of a portfolio and provides the basis for transparent and understandable investment decisions.
In an increasingly complex capital market environment, the SAA Forum supports institutional investors in developing robust and resilient capital investment strategies. The focus is on analyzing liabilities, defining clearer investment objectives, and constructing resilient target portfolios.
A successful capital investment strategy begins with a deep understanding of liabilities.
Liabilities as a starting point
The structure of liabilities provides the insurance technical cash flows and thus the requirements for capital investment. The liabilities form the foundation of any long-term asset allocation.
Our approach therefore takes into account both the asset and liability sides of the balance sheet and integrates the requirements of asset liability management into the strategic decision-making process.
Risk-On and Risk-Off Portfolios
The goal of successful asset allocation is to balance security and yield. Therefore, we distinguish between a risk-off portfolio and a risk-on portfolio.
Risk-Off Portfolio
The risk-off portfolio primarily serves to cover liabilities and consists predominantly of high-quality bonds and predictable cash flows.
Risk-On Portfolio
The Risk-On portfolio focuses on yield sources such as:
- Stocks
- Corporate bonds
- Alternative Investments
- Illiquid asset classes
The combination of both portfolios creates a robust target portfolio with an optimized risk-return profile.
Macroeconomics and capital market assumptions
Capital market decisions should be based on understandable assumptions.
- How do interest rates develop in a recession?
- How do stock markets react to stagflation?
- What effects do economic regime changes have on credit risk premiums?
To answer these questions, we analyze historical capital market data, macroeconomic relationships, and long-term risk premiums. The goal is not to predict the future but to develop more plausible and transparent decision-making frameworks.
Strategic asset allocation in a VUCA world
Capital markets are increasingly characterized by VUCA (Volatility, Uncertainty, Complexity und Ambiguity)
Traditional relationships between inflation, interest rates and risk premiums are increasingly being replaced by new market regimes. Zero-interest policy, geopolitical crises, inverse interest rate curves or inflationary shocks present new challenges for institutional investors.
Therefore, our approach is based on:
- Robust modeling
- Macroeconomic scenario analyses
- Transparent investment decision
The goal is to develop strategies that remain viable and resilient even under different market conditions.
Seminars, workshops and consulting
Would you like to review or develop your Strategic Asset Allocation?
The SAA Forum supports you through:
- Seminars & Workshops
- Asset Allocation Studies
Contact us for a non-binding exchange.