Page 42 - FINAL CFA SLIDES DECEMBER 2018 DAY 12
P. 42

LOS 43.f: Explain the specification of asset                                        Session Unit 12:
        classes in relation to asset allocation, p.176
                                                                                            41. Portfolio Risk and Return: Part II


        A strategic asset allocation specifies the % allocations to the included asset classes:
        •   Select assets with high correlation of returns within an asset –assets will be similar in their investment performance.
        •   Select assets with low correlation of returns between asset classes to secure risk reduction (portfolio diversification).












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