Our top-down analysis deals with the "big picture." The in-depth analysis and evaluation of the macro economic and geopolitical environment is the cornerstone of our top-down approach which results in our strategic asset allocation. This is a proportional combination of assets based on expected rates of return for each asset class. Strategic asset allocation generally implies a buy-and-hold strategy, even as the shift in the values of assets cause a drift from the initially established policy mix. For this reason, we continually rebalance the portfolios.
The next step is to develop our tactical asset allocation which is derived from the strategic asset allocation. Over the long run, a strategic asset allocation strategy may seem relatively rigid. Therefore, it is necessary to occasionally engage in short-term, tactical deviations from the mix in order to capitalize on unusual or exceptional investment opportunities. Short term market relevant fundamental as well as technical factors are evaluated which then filter into the tactical asset allocation decision. This flexibility adds an element of market timing to the portfolio.
Both the strategic and tactical asset allocation decisions are taken by the investment committee which meets once a month.