Asset Allocation

“Career risk aversion is a real thing, and it's an insidious thing, and it probably affects asset allocation and manager selection more than people are willing to admit.”

“There isn't a scientific methodology to getting to the exact right asset allocation that a family will not only stay the course during difficult times, but buy their losers and sell their winners to make sure that we stay rebalanced.”

“Success there was on the premise that we spend 90% of our time on manager selection, but really it's asset allocation that's going to determine returns.”

“It's not going to take off until it has an index. I often say it's in the Wizard of Oz, the scarecrow. He wants to be recognized as smart. He is smart, but Wizard says, all you need is a diploma. And then everybody will think you're smart. I've discovered in t…”

“So I think as an industry, we spend a lot of time thinking about the bottoms up piece, idiosyncratic piece, but the majority of your return comes from your top down asset allocation decisions.”

“The study describes investor behavior, not finance theory. Investor behavior causes policy asset allocation to dominate portfolio returns, since institutions tend to hold stable commitments to a broadly diversified portfolio of marketable securities.”

“David was a staunch proponent of asset allocation, but he recognized that asset allocation drives returns in the rearview mirror. If investors choose equities, and equities outperform over time, then asset allocation mathematically dominates long-term return a…”

“Asset allocation being something we think about episodically, but we think a hard way to add value in hedge fund portfolios.”

“I think what we think is a best practice is to say, actually, 100% of your performance in your asset allocation is a function of your organizational capabilities.”

“How something behaves is far more important than what it's called. And so when you build an asset allocation, you describe the behaviors that you expect out of that asset, and you build a portfolio, you diversify a portfolio of different behaviors rather than …”

“Not everyone's going to make that shift immediately. It's the big sovereigns and the big supers that are doing it right now. But we believe that the data-driven approach to asset allocation is a change that people are not going to reverse. That's going to only…”

“Long-term diversified portfolio is the winning hand in most cases, and we believe within asset classes that it makes sense to have as much concentration as is tolerable, that you're really getting the diversification across the asset classes primarily as well …”

“Because as we know, what, 60, 70% of our returns is driven by asset allocation.”

“Asset allocation is the key investment decision, so that bulk of the outcomes are determined by what your asset allocation is.”

“In order for us to generate returns going forward, having a very prescriptive asset allocation structure we don't think is an advantage.”

“Historical correlations would be useful, but dangerous to rely on too much. And if you think about asset allocation, right, you're relying on your forecast of volatility, expected returns and correlations.”

“Constructive paranoia, when you're thinking about markets and asset allocation and investing, is as much about, oh my gosh, am I overexposed to something that might go wrong, As it is about, oh my gosh, am I underexposed to this particular opportunity that peo…”

“If you think about it, there's a lot of things you can do that are not about either asset allocation or investment implementation that have probably even more impact on the longevity and sustainability of an endowment program.”

“The more exposure you have to managers across the asset allocation spectrums, I really feel that, especially today, I learned the most from my actual managers.”

“It's not very dynamic. It's basically once a year... We have a tactical overlay, which is the hedge, and that's every day. So the real asset allocation work is done once a year.”

“And the ability to communicate with a committee and say, these are our targets. We want to shift it. Let's shift it this way and keep people on board was so powerful. I think that was as big of a component as just that particular asset allocation strategy.”

“I think there's a bit of a false dichotomy that people draw between what's more important, manager selection or asset allocation. So let me first say, if you're selecting managers who can't outperform. That's a problem. Then it's a problem. You should just ind…”

“The research also shows that you can take the top, you know, 12, 15 Asset allocations out there, plot them over 30 years, and while they'll have great variance in any one to three year period, over 30 years, they're all within one percentage point compounded o…”