Introduction to the Asset Allocation Suite

The three modules of the Asset Allocation System facilitate the construction of realistic, effectively diversified portfolios with well-managed risk. The software provides a complete system for making asset allocation decisions.

• The Estimator (Data Management Module) provides many advanced statistical methods for enhancing your risk and return estimates.

• The Optimizer (Portfolio Optimization Module) computes the Michaud Resampled Efficient Frontier™ and provides the tools to customize the optimization to your investment philosophy (constraint options, long-short, active weight, etc.).  

• • It also contains the Michaud-Esch rebalance test, which determines whether or not a significant difference exists between the selected portfolio on the efficient frontier and the current holdings relative to likely performance. This need-to-trade test prevents ineffective and costly trades while enhancing investment value.

  • The Trade Advisor offers a probability based stopping rule for how to trade.

• LifeCycle (Portfolio Analysis and Financial Planning Module) helps select the appropriate portfolio from the efficient frontier for the specific investment program.

For more information pertaining to Michaud optimization, the rebalance test, Trade Advisor, or LifeCycle's calculation methods, talk to your relationship manager or view the Optimizer and LifeCycle help manuals.