Balanced Asset Allocation Portfolio


Our balanced asset allocation portfolio is rebalanced based on changes in growth and inflation expectations. It aims to provide stable returns during all time periods while the assets are re-weighted based on changes in those growth and inflation expectations.

Current Setting:

The current economic setting can be summarized by the following 4 statements:

1) shorter-term growth expectations are falling,

2) medium-term growth expectations are falling,

3) shorter-term inflation expectations are falling and

4) medium-term inflation expectations are rising.

Current Weighting:

From a balanced asset allocation perspective, those scenarios warrant an equity allocation of 47.1%, an allocation towards bonds of 27.2%, an allocation towards inflation protected bonds (Tips) of 25.3%, as well as an allocation towards gold of 0.5%. Compared to historical allocation suggestions, allocation towards equities is low, towards bonds the allocation is high, towards inflation protection bonds high and towards gold the allocation is seen as high.

Gold 0.5%

Within the current economic setting, a balanced asset allocation strategy appears to be able to generate 6.6% (annualized), which is towards the lower side of historical return expectations

Balanced Asset Allocation Portfolio:

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