Encompassing 11 geographic regions and 11 asset classes, the forecasting models are based on the belief that asset classes at times exhibit relative opportunities that can be leveraged by the investor, the company said in a news release. Currently, the Russell Enhanced Asset Allocation process seeks to identify these occurrences for 114 asset-class pair comparisons and then recommend investment action.
Initially, Russell will provide EAA to institutional investors as a collection of data, advice, and fiduciary services, but over time, the insights and direct implementations are expected to be made available to defined contribution plans and retail investors, the announcement said.
As part of Russell’s portfolio management approach, the company said EAA encourages clients to stick to their strategic asset allocation and to deviate from the strategic benchmark only with a full awareness of its impact throughout the portfolio. Additionally, Russell will work with clients to make sure that any adjustments or ’tilts’ resulting from EAA do not overwhelm or interfere with their other investment activities, Russell said in the announcement.
“As the last two years have demonstrated, the markets can move in extremes, and these extremes can represent real investment opportunities. Unlike other asset class timing approaches, Russell Enhanced Asset Allocation provides a disciplined, structured and high-conviction approach for investors to respond to markets that are at very likely unsustainable levels,” said Pete Gunning, global chief investment officer, in the news release. “We have offered this service to select clients and are now offering EAA broadly as a service that will allow Russell’s clients the flexibility to shift their investment portfolio based on the insights of Russell’s global network of investment strategists and market researchers.”
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