The TAA (Tactical Asset Allocation) framework implies constructing investment portfolios based on asset classes of underlying instruments and short-term performance forecasting of the corresponding indices. Originated from the traditional asset classes, TAA is often used for hedge FoF construction. However, when applied to alternative investments, it presents a highly misleading concept:
- Fund managers may use multiple strategies, which makes it difficult to categorize
- The whole TAA framework relies on the style-weighted allocation (read index-weighted allocation) that predetermines allocation across individual funds. Since the majority of hedge funds are not correlated with their corresponding indices, the applicability of the TAA becomes questionable.
-
JOIN OUR WEBINAR
Tactical Asset Allocation: why it is inapplicable to hedge funds. Major problems and drawbacks of TAA for hedge funds. Analysis of correlations between individual funds and their indices.
TAA Problems
03 Jan 2024;
05:00PM - 06:00PM
TAA: its pros and cons31 Jan 2024;
05:00PM - 06:00PM
TAA: its pros and cons28 Feb 2024;
05:00PM - 06:00PM
TAA: its pros and cons
The ABC Quant video materials and tutorials available on or through this website are protected by copyright and international intellectual property laws. Your right to view the ABC Quant video materials and tutorials is strictly on invitation only basis. You may not download, distribute or otherwise publish, copy, transmit, modify, reverse engineer, or sublicense any video content and/or tutorials available on or through this website.
