Tactical Asseet Allocation: Empirical Study And Quantitative Methods In Sectors And Style Allocation

Tactical asset allocation is one important method of asset allocation, it is the opposite to passive asset allocation. At present, the classifications of asset allocation that the academy defined differ from each other, so people are confused about the concepts of strategic asset allocation, tactical asset allocation, dynamic asset allocation, active asset allocation and passive asset allocation.The obscurity on the concept hinders people from deep understanding of tactical asset allocation, furthermore, it hinders the real application of active asset allocation. In the context, the author tries hard to clarify the concept of each method of asset allocation. The way of doing this is to distinguish two categories of classifications.After this, the author explains that the necessity of tactical asset allocation is the existence of non perfect market and the feasibility is the existence of lagging information. Finally, the author explains in detail three methods of dynamic asset allocation, that is buy-and-hold, constant mix and portfolio insurance, and points out that the former one belongs to passive asset allocation and the other two methods belong to active asset allocation.Based on the research of domestic market, the author argues that tactical asset allocation has broad market potential in China A-share market and must be helpful to the institutional investors.