Passive or Active Asset Allocation?... Your Choice

Passive Asset Allocation

A Passive Asset Allocation or a  buy and hold strategy means that the portfolio is designed to hold on to the original investments.  Academic research shows that mutual funds and pooled-funds often fail to outperform a simple buy and hold strategy on a risk-adjusted basis.  Studies have shown that Asset Allocation decision explains over 85% of Portfolio returns.

If requested, Japa International  will manage the funds according to your preferred  approach.  With Constant Mix Strategies (proportion, beta, components, indexes), rebalancing is done to maintain original condition. With Constant Proportion Portfolio (same % investment in each asset or securities), rebalancing is done to maintain original condition.

Active Asset Allocation

An Active Asset Allocation strategy is one in which the composition of the portfolio is dynamic or tactical.  The portfolio manager periodically changes the portfolio components or the components’ proportion within the portfolio in order to maximize return and or minimize risk.

Academic research has shown that an active dynamic or tactical portfolio management strategy can provide superior performance to a passive asset allocation.

Protection of the Assets

A portfolio protection strategy involves adding components to a portfolio in order to establish a floor value for the portfolio using equity, stock index, put options, future contracts and dynamic hedging.

A portfolio protection strategy is particularly attractive to clients holding specific securities and seeking particular partial or total protection.  derivative instruments are used to hedge a position (as opposed to using derivatives instruments to speculate).

Portfolio Management Alternatives

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