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Asset allocations

The EV Asset Model captures the variation in optimal risk-return tradeoff with investment term so asset allocations determined over different investment horizons will generally be different. Asset allocations also vary with risk appetite, and the clear link between market conditions and asset returns means that they also change with each model update.

Latest update

The chart shows how the optimal asset allocation varies with risk. Risk appetite increases from left to right. The optimisation seeks the maximum expected growth rate for a regularly rebalanced portfolio to a fixed allocation over the investment term subject to a maximum standard deviation or volatility corresponding to a risk profile.