Our Quantitative Analysis team generate estimates as to how a wide range of asset classes are expected to behave over the long-term with respect to: returns, volatility and co-variance. Our estimates are based on Modern Portfolio Theory techniques to derive efficient portfolios and maximise expected returns for a given degree of risk. They are rooted in historic data analysis, current market yields and estimates of risk premiums, as well as other factors such as, current corporate debt default rates and inflation.
We continually review the performance of this model and provide our clients with a Quarterly Estimate Update Report, explaining any changes.
In October 2009, we published the white paper "Did asset allocation modelling survive the storm?" reviewed by AKG actuaries, as an analysis of how the model prior to the global market collapses of the credit crunch, had described the potential for negative returns. The model is shown to be a valuable tool for advisers and their customers in successfully describing the potential nature of these returns.
 |
"Confidence in this context comes from demonstrating that, even in the extreme market conditions seen recently, the experience is within the boundaries as expected using the model. Thus, whilst absolute returns in the short term appear, and indeed are, very disappointing, investors may draw some comfort from knowing that their longer term strategies generally remain within the level of expectations assumed by the model” AKG Actuaries July 2009. Preface to ‘Did asset allocation modelling survive the storm?' |
Please contact us, to find out how we can enrich your customer relationships.