Masters Degrees (Business Management)

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Browsing Masters Degrees (Business Management) by Subject "Asset allocation"

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    An overview of asset allocation processes and their importance in portfolio management
    (Stellenbosch : Stellenbosch University, 2001-04) Gantz, Frederick Albrecht; De Villiers, J. U.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
    ENGLISH ABSTRACT: Rapid development of asset pricing models, asset return prediction models, information technologies, and the integration and globalisation of world economic markets, require the investor to have a fundamental understanding of the role of asset allocation (diversification) and the various strategies available in achieving investor's risk and return objectives. Assets are allocated across different asset classes in an attempt to optimise the combination of investment returns and investment risk. In this way your investment will not be subject to the volatility of anyone asset class alone. It is important to note that the movements of one class of assets (stocks, bonds or cash) may be somewhat offset by the non-correlated movement of a different class of assets. The intent of asset allocation is not necessarily to increase return as much as it is to fmd the accepted rate of return, while simultaneously reducing risk or maintaining it at a predefined level. This study explores the underlying theories concerning the relative importance of asset allocation in determining portfolio performance, and the three primary asset allocation strategies available. It also discusses relevant theory of how the predictability of asset returns and the investment horizon of a portfolio can have an impact on which asset allocation strategy to utilize in achieving the necessary risk and return objectives of the investor.