Times have been tough of late for advocates of asset allocation. Highly correlated markets have made the process seem superfluous to many. Target date mutual funds, which oftentimes represent a default option for many retirement plans, have undergone a makeover in light the financial crisis and subsequent bear market. In addition to reducing equity exposures they have upped inflation protection via TIPS. A look at what one might call a consensus asset allocation shows how little effect a diversified approach has added to portfolios the last couple years. It is no wonder that institutional investors continue to favor alternative asset classes in an attempt to both add alpha and diversification. In today’s screencast we look at some recent asset allocation moves.
Items mentioned in the above screencast:
Target date funds are getting an asset allocation makeover. (Institutional Investor)
Target date funds: do investors understand the risks? (Barron’s)
How do you generate an asset allocation that actually differentiates itself? (ETF Replay)
No wonder investors continue to look to alternative asset classes. (All About Alpha)