Global Asset Allocation Strategy

BCA’s GAA service is designed to focus on the medium and long-term prospects for asset classes and their components, and what this means for portfolio construction. Our models, which are only a starting point for our analysis, cover the asset class decision, as well as country selection. In addition, we have a wealth preservation model which is designed to outperform in bear markets.

Deliverables:

There are three delivery mechanisms for the Global Asset Allocation service:

  • The first is Quarterly reports that cover all the major asset classes globally. These are backed up with Monthly reports to update the most recent Quarterly document. Emphasis is placed on where we have added value – as well as where we have fallen short – and our performance in the model portfolio is reviewed as to hold us accountable.
  • Our Special Reports represent the second delivery tool. We have written on such diverse topics as how we apply the principles of behavioral finance, sector versus country effects, a series of indicators to monitor for the onset of an equity bear market, as well as the role of hedge funds, among many others.
  • We can extract any part of our process and highlight its relevance to you. This constitutes the third delivery mechanism – our interaction with clients. We can tailor calls and visits, review your portfolio against the BCA view and/or act as a sounding board for your allocation issues.

Methodology:

We use the principles of behavioral finance and view the world in three time frames: the tactical runs from 0-3 months, the cyclical is our 3-12 month view, while our secular outlook extends over 1-5 years. The primary emphasis of GAA is on the cyclical viewpoint, which forms the basis of our portfolio construction. Within our cyclical analysis we focus on value, liquidity and economic/profit momentum. All three have to line up with our medium risk portfolio before we will make a decision. In our high risk portfolio, however, we will typically look to align only two of the three and will tolerate increased benchmark divergences. We also construct a matrix of sector and country views and look for common characteristics that are driving the two simultaneously.

Chief Strategists: Ian MacFarlane & Doug Peta

Ian MacFarlane joined BCA Research in 2006 as Managing Editor of the European Investment Strategy service, before assuming his role as Managing Editor for the BCA Global Asset Allocation. This followed a 25-year career in senior roles as an economist, strategist and fund manager in Johannesburg, Hong Kong, London and New York. He has covered all the major asset classes in both developed and emerging markets, using both qualitative and quantitative investment tools in portfolio construction. Mr. MacFarlane has wideranging experience in initiating research and developing research products, and has also advised governments and policymakers on topics as diverse as pensions and economic statistics. Mr. MacFarlane holds a B.Sc. in Economics from Hull University, England.

Doug Peta joined BCA research in 2010 as a Senior Editor with the U.S. Investment Strategy service and was promoted to Managing Editor working with the GAA service in 2014. Doug has over 15 years of investment experience and has worked as a market strategist and financial services analyst within the money management industry, as well as a trader on both the buy and sell sides.

Download a PDF of Global Asset Allocation Strategy.

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