Time is Right for GAA

Many institutions rely on strategic asset allocation to maximize their risk-adjusted returns. However, the inherent long-term focus of many such allocations may cause investors to miss near-term market opportunities. This weakness can be addressed by making a strategic allocation to a global asset allocation (GAA) strategy. The current environment appears promising for GAA, which has historically participated in up markets, while protecting investor capital in down markets. The sole focus of GAA managers is to identify and act on opportunities. They move quickly to protect capital and to capture market upside opportunistically as market cycles develop. Thus, GAA managers provide timing diversification to portfolios. These characteristics allow GAA to address late-market cycle opportunities and risks without the potentially higher costs that come with alternative strategies.

woman in focus sits and has look of joy with other institutional investors around her

Capturing Market Inefficiencies

Our top-down process is grounded in behavioral finance: investors gradually and predictably change emotions over time. The market pushes some asset classes too high on emotions of greed, while pushing other asset classes too low on emotions of fear. Our proprietary models, developed and applied over several market cycles, capture the cycle of emotions through relative value and momentum. Balentine research demonstrates long-lived relationships of returns exist between asset classes and we use these emotional over-reactions to build positions in asset classes that exhibit market confidence and then move out of those positions as market confidence erodes. As long as investors continue to demonstrate behavior driven by fear and greed, there will always be market inefficiencies our models can capture.

Balentine wealth management employee

Here to Help Your Plan

We bring a simple, disciplined, and repeatable process that is model driven and highly scalable. GTAA focuses on relative valuation and momentum to determine which asset classes offer the best risk-adjusted reward. The momentum piece of our investment process is very differentiating versus our peers. By utilizing momentum, we avoid value traps and proactively move into asset classes that are poised to outperform.

Why Global Asset Allocation (GAA)?

Balentine helps institutions achieve outperformance through asset class selection, not security selection. Studies* show, on average, that asset allocation accounts for 100% of the level of returns over time. We are nimble in our ability to tactically shift in and out of asset classes as market cycles change. With a 30-year demonstrated track record, consultants can rest assured our record of success is not an investment fad or anomaly.

*Source: Ibbotson, Roger G. and Paul D. Kaplan. “Does Asset Allocation Policy Explain 40, 90 or 100 Percent of Performance?” Financial Analysts Journal, Jan/Feb 2000, pp. 26-33.

Complement to Strategic Asset Allocation

Time delays between asset allocation recommendations and implementation can be costly for institutions. Balentine solves this issue by identifying opportunities and tactically shifting with decisive moves.

Why Global Asset Allocation (GAA)?

Limit Downside Risk in Difficult Markets

GAA strategies are designed to protect capital in down markets and outperform in up markets.

Why Global Asset Allocation (GAA)?

Individualized Approach

We tailor our approach to meet each client’s individualized risk tolerance and regulatory restrictions, as set forth in the investment policy statement (IPS).

Why Global Asset Allocation (GAA)?

Efficient Implementation

Low-cost funds provide an efficient way to implement best ideas across a global opportunity set.

Why Global Asset Allocation (GAA)?

Outperformance Through Superior Asset Allocation

Balentine’s GAA strategies have provided outperformance and a customizable complement to strategic asset allocation over multiple market cycles.

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Contact Us

Learn more about how to invest in GAA at Balentine.

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