Lifetime Clients with Strategic Asset Allocation with Unit Trust By Christopher Chiu

Strategic asset allocation (SAA) refers to a long-term portfolio strategy that involves choosing asset class allocations and rebalancing the allocations periodically. Rebalancing occurs when the asset allocation weights materially deviate from the strategic asset allocation weights due to unrealised gains/losses in each asset class.

The SAA strategy is used to diversify a portfolio and generate the highest rate of return at a given level of risk. It is similar to a buy-and-hold strategy in that target asset weights are chosen and maintained over a long period of time. Target allocations in the SAA strategy depend on several factors, including investor risk tolerance, time horizon, and return objectives.

Learning Outcome