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Portfolio design
Identifying the sources of long-term, above-average returns
After establishing the most suitable asset allocation for a given portfolio, the next priority
is to determine the best way to gain exposure to each asset class and financial market.
What are the factors that cause some investments to outperform their peers across
multiple markets in given geographic regions? Research by SEI suggests that you start by
diversifying by asset classes—including equity, fixed-income, and alternative-investment
portfolios, and also consider what types of investment strategies work best across various
phases of the economic cycle (expansion, stress, distress, recovery).
Projections regarding how the portfolio may react to each phase, along with an identification
of return sources, complete the analysis.
2.
Economic
Growth
Expansion
Interest
Rates Rise
Tightening
Economic
Decline
Contraction
Interest
Rates Fall
Easing
