Asset Allocation Archives - Page 3 of 3 - Fundopedia

Alternative Investments…

From Modern Portfolio Theory to Pioneering Portfolio Management: The Endowment Model

6 Oct 2013October 15, 2013

Implications of Modern Portfolio Theory Traditional and widely used institutional policy portfolios commonly consisted of a majority of U.S. equities and a reciprocal proportion of U.S. bonds, e.g., 60% stock/40%…

Alternative Investments…

Approaches to Tail Risk Hedging in The Endowment Model

1 Sep 2013January 5, 2026

In the Foreword of David Swensen (2009), Charles Ellis commented that Yale was good at playing defense, because the endowment was built to withstand the inevitable storms that face capital…

Asset Allocation…

Asset Allocation Funds

7 Jun 2013August 26, 2025

An asset allocation fund is a portfolio of mix of equity, fixed income securities, and cash equivalents; asset allocation funds have access to main asset classes exposure via one single investment.…

Alternative Investments…

Alternative Investments in a Portfolio

23 Jan 2013September 12, 2023

Traditional asset classes such as stocks, bonds, and cash tend to be highly correlated with each other during the down markets. The long-only investments may not meet the changing needs…

Asset Allocation…

Behavioral Portfolio versus Mean-Variance Portfolio

19 Oct 2012September 14, 2022

Investors that follow the mean-variance portfolio (MVT) theory (Markowitz, 1952) determine optimal aggregate portfolios on the efficient frontier by balancing risk aversion and return preference. Many investors have difficulty specifying…

Asset Allocation…

Asset Allocation Framework for Individual Investors

13 Sep 2012August 26, 2025

The global financial crisis changed strategic asset allocation framework, as investors are more risk conscious and especially mindful of market liquidity and the importance of credit risk in sovereign bond…

Alternative Investments…

Allocation in Hedge Fund of Funds

13 Aug 2012August 26, 2025

One of the main reasons that institutional investors include hedge funds in their portfolios is the expected diversification benefits with existing array of investment opportunities. In the U.S., institutions such…

Asset Allocation…

Risk Allocation, Asset Allocation, Tracking Error Allocation

17 Jul 2012March 31, 2025

Risk allocation emerged in the late 1900s, in response to concerns about the level of risk being accepted in a portfolio. The process involves setting up a plan for how…

Asset Allocation…

Negative Real Interest Rates & Endowment Investing

3 Jul 2012July 17, 2023

In the U.S., the real (i.e. inflation-adjusted) rate of return on almost all federal government bonds is negative; such downward trend in government yields is not a recent phenomenon. In…

Asset Allocation…

Naive 1/N Portfolio versus Sophistication and Optimization

28 Jun 2012March 28, 2025

Optimal diversification is one of the key insights of modern portfolio theory, however, due to estimation errors, theory-based portfolio strategies are not as good as one once thought; under some…