Tactical Asset Allocation (TAA)

Tactical Asset Allocation (TAA) is an investment style where the main objective is the management of market risk while maximising portfolio returns. The three main Asset Classes are Stocks, Bonds and Cash.

Tactical Asset Allocation can be implemented via funds ETFs or via Securities and invests in Exchange-traded, liquid Securities. TAA will pursue an active allocation strategy, diversifying between Fixed Income, Equities and Cash. A diversified TAA portfolio actively adjusts asset allocation percentages in order to profit from an eclectic range of data inputs, both market-specific and non-market-specific. Non-market specific Macro and Micro Economic data such as growth, and inflation could result in changes in Monetary or Government Policy. Market-specific data include Valuations and Sector influences. In considering implementing a TAA Strategy, the Investment Allocation and Strategy must be documented. This covers the Asset Classes and Asset Allocation, creating certain boundaries for Fixed Income and Equities.