Talking Point Anchoring strategic asset allocation to valuation rather than to averages

The key difference between objective based multi-asset investing and traditional multi-asset investing is that the objective based portfolio is not anchored to a single strategic asset allocation (SAA) based on long run assumptions. The application of a long run SAA portfolio is convenient since it provides a basis for anchoring the investment strategy and therefore also provides a performance benchmark. However, we have long argued that despite its conveniences, a long run SAA framework leads to inefficient outcomes when compared to achieving an objective of real returns.