The challenge is in building one that continues meeting investment objectives as markets change
FOR decades, institutional portfolios were constructed primarily through asset-class allocations, with risk budgets, benchmarks and accountability organised around the same categories.
This provided discipline, but it could also lead investors to assess each allocation in isolation rather than by what it contributed to the portfolio as a whole.
This matters more in today’s environment. Geopolitical fragmentation, fiscal pressures, uncertainty over inflation, technological disruption and changing correlations have increased the range of economic outcomes for which asset owners need to prepare.