2009 Due Diligence Forum

Strategic tilting – guidelines for use in portfolios
 

Category

The Lot - Multi-asset class

Company

Russell Investments

Research Paper

The idea behind strategic tilting is very simple. On occasion markets can move to extremes of pessimism or optimism. Strategic tilting is a strategy that aims to take advantage of extreme market movements. This research paper shows how strategic tilting can be used to temporarily adjust or tilt a portfolio’s risk exposure from its long-term default strategic asset allocation. It explains that strategic tilting should be pursued selectively, as good opportunities will emerge only occasionally and may carry significant risk of client dissatisfaction, and argues that strategic tilting recommendations should only be made when there is high confidence, and where both adviser and client can cope with bets that may not pay off immediately.

Presentation

Andrew Pease, Senior Investment Strategist, Russell Investments