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Active asset allocation

clock 2 MIN READ

Diversification allows you to reduce risk, while providing you access to global opportunities. It’s a sound investment strategy.

Short- and long-term recommendations

Our active asset allocation recommendations are based on our shorter-term expectations (a 6- to 18-month perspective). Our longer-term, strategic asset allocation recommendations are designed for investors willing to tolerate the ups and downs of the financial markets across a full market cycle (in which prices are rising or expected to rise, as well as falling or expected to fall).

Our blend of qualitative (trends) and quantitative (data) analysis enables us to design diverse asset allocation portfolios.

The asset classes that make up a given portfolio are based on investors’ goals (along with other constraints and preferences), including:

  • Liquidity to manage short-term expenses
  • Risk/return preferences
  • Tax considerations
  • Funding specific liabilities

Our blend of qualitative (trends) and quantitative (data) analysis enables us to design diverse asset allocation portfolios that fall into two broad categories:

  1. Stability focused: Potential asset classes are screened according to risk metrics like peak-to-trough declines (the change from the highest to the lowest point). We manage risk on an absolute basis, rather than relative to a benchmark.
  2. Growth focused: These pursue the goal of achieving the highest possible return for a given risk tolerance. With these, we manage risk on a relative basis, in an effort to participate in broad market rallies.

Applying investor risk preferences to all aspects of the investment process has led to innovative investment strategies, such as our Global Managed Volatility Fund, which aims to generate long-term returns similar to the broader equity market, but with less volatility), which have gained greater adoption in the industry.

Past performance is not an indication of future performance. Investments in SEI Funds are generally medium to long-term investments. The value of an investment and any income from it can go down as well as up. Investors may get back less than the original amount invested.