Our dynamic asset allocation process is focused on the 3 key metrics of asset returns – valuation, momentum and macro factors. Research findings from these metrics are combined to create an asset class hierarchy.

Valuation is the cornerstone of the process due to its predictive effect on asset price returns. We use a range of metrics to understand valuation. As valuation works well particularly at extremes, we have to look to momentum and macro to provide context.

We monitor short and medium term momentum of price movements, gauge trend changes, and assess if current momentum will persist or deteriorate.

Macro indicators, such as the fiscal and monetary policies of each country, are evaluated with a quantified direct link to asset returns. Is the macro outlook a headwind or tailwind?