Strategic Asset Allocation

In this month’s SAA Special, we uncover the historically high US equity market concentration and valuation levels, which implies below average returns over the next decade. In addition, we explain the importance of choosing the right equity benchmark, and the way expected returns are calculated, to avoid allocating too much to US (cap weighted / tech heavy) equity indices in the strategic asset allocation.

The Dutch central bank warned this week of a new era full of international tensions, fragmentation and bloc formation. Trump 2.0 is unlikely to make things better. In this special, we look at the interaction between (geo)politics, economics and markets through four lenses. From this, three scenarios for globalization follow, accompanied by the consequences for different asset markets.

Strategic Asset Allocation (SAA) plays a crucial role in an investors’ decision-making process. This report features the quarterly update of three SAA models, their portfolio characteristics and the data we have used to construct the SAA models. In addition, we update the Expected Returns based on the return assumptions of approx. 50 asset managers and present tables with volatility and correlation data for every asset class.