Strategic Asset Allocation

We believe the process starts with understanding the client’s goals and objectives.

The right strategic asset allocation model is responsible for over 70% of a client’s investment performance. At Agilis, we focus on partnering with our clients to determine the optimal strategic asset allocation model to best meet a client’s objectives and risk preferences. Our investment and actuarial expertise help us provide vital insight into expected outcomes and risks for various types of clients and their respective asset pools. As an independent advisor, we focus on finding the proper allocation among all asset classes for our clients.

We believe the process starts with understanding the client’s goals and objectives for their fund and the liabilities that the fund supports. We work with clients to define risk and expected outcomes using various asset and liability tools and measure the expected outcomes over agreed-upon time periods to find the appropriate strategic asset allocation model.

Standard Strategic Allocation Services:

Capital Market Assumption Setting – This process involves setting assumptions about the expected returns, volatility, and correlations for various asset classes. These assumptions are derived from historical data and forward-looking market expectations, providing the foundation for strategic asset allocation.

Scenario Development and Testing – Different market and economic scenarios are envisioned and modeled to test how a portfolio might perform under various conditions. By testing portfolios under these scenarios, investors can gain insights into potential vulnerabilities and opportunities in their investment strategy.

Stochastic Asset/Liability Analysis – This advanced method uses statistical processes to predict possible investment outcomes based on probability, helping investors understand the potential variability in asset and liability values. For example, by analyzing thousands of potential market paths, an investor can estimate the likelihood of their portfolio meeting a specified target value or the chances of a funding shortfall.

Alternative Portfolio Development – After understanding potential risks and returns from the current allocation, alternative portfolio structures are proposed to optimize the investment strategy. For instance, if the current portfolio is heavily weighted in equities and exposed to significant volatility, an alternative might be introducing more bonds or investments to enhance diversification and reduce risk.

Customized Consulting – Beyond standardized services, clients often have unique needs and situations that require tailored solutions. For example, a client may be looking to invest in environmentally sustainable assets. In this case, the strategic allocation team would offer consulting to build a green or ESG (Environmental, Social, and Governance) compliant portfolio, ensuring the client’s values and financial objectives are aligned.

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