Financial Quotient

What is asset allocation?

Asset allocation is the act of portfolio management, including determining how much each asset class is to be allocated in an investment portfolio.

There are different methods to calculate the portfolio composition, often following simple rules of thumb. For example, an asset allocation may be a targeted fixed allocation of 50 per cent in a unit trust and 50 per cent in Singapore savings bonds.

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A version of this article appeared in the print edition of The Sunday Times on June 24, 2018, with the headline 'What is asset allocation?'. Print Edition | Subscribe