Fund Management Companies Active Asset Allocation Theory And Applicability Analysis

Active 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 academydefined differ from each other, so people are confused about the conceptsof strategic asset allocation, tactical asset allocation, dynamic assetallocation, active asset allocation and passive asset allocation.The obscurity on the concept hinders people from deep understandingof active asset allocation, furthermore, it hinders the real applicationof active asset allocation. In the context, the author tries hard toclarify the concept of each method of asset allocation. The way of doingthis is to distinguish two categories of classifications.Then, the author argues that, the foundation of passive assetallocation—Efficient Market Hypothesis—is too perfect to be real, soit has defects of its own. After this, the author explains that thenecessity of active asset allocation is the existence of non perfectmarket and the feasibility is the existence of lagging information.Finally, the author explains in detail three methods of dynamic assetallocation, that is buy-and-hold, constant mix and portfolio insurance,and points out that the former one belongs to passive asset allocationand the other two methods belong to active asset allocation.Based on the research of both the international and national market,the author argues that active asset allocation has broad market potentialin China.