AZ Sestante manages your model portfolio using a Dynamic Asset Allocation (DAA) approach – actively changing your exposure to various asset classes based on market conditions and our views on future performance and the risks inherent in investment markets.
We begin with Strategic Asset Allocation (SAA), the long-term allocation to growth assets (Australian shares, international shares, and real assets such as infrastructure and property) and defensive assets (fixed interest and cash) that meets your defined risk and return requirement. The SAA also sets the minimum and maximum amount we can allocate to each asset class.
The SAA is then adjusted and managed to reflect our short-term views and forecasts for markets and asset classes – this is the Dynamic Asset Allocation (DAA). It allows the portfolio to reflect our current global views on investment markets, with constant monitoring to ensure the DAA remains consistent with those views.
Our process uses the Black-Litterman Model to optimise asset allocation for the highest estimated risk-adjusted return, combining 10-year expected returns, historical volatility and correlation data with our investment team's current fundamental short-term view.
Download the fact sheet below for the full explanation of our Dynamic Asset Allocation process.
Download the Dynamic Asset Allocation Fact Sheet (PDF)