FSF News

Budget 2017: Plans to build 300,000 homes a year The chancellor says he understands the difficulties young people have in saving for a de... Read more...

Hammond: Driverless cars will be on UK roads by 2021 The chancellor says the country must embrace new technologies in order to succeed.... Read more...

Chancellor Philip Hammond's 'no unemployed' remark attacked The chancellor made the comment as he played down the threat posed to jobs by new techno... Read more...

Labour's John McDonnell demands 'emergency Budget' Shadow chancellor John McDonnell demands 'an emergency Budget for public services '.... Read more...

Retail sales in first annual fall since 2013 Despite the annual sales fall, the underlying picture is one of growth, the UK statistic... Read more...

Brexit: Goldman Sachs chief Lloyd Blankfein suggests second vote Lloyd Blankfein tweets that many want a "confirming vote" on a "monumental and irreversi... Read more...

Russia and Venezuela agree debt deal Russia said it had agreed to minimal repayments over six years on more than $3bn in debt... Read more...

Asset allocation

The importance of asset allocation (the distribution of UK equities, North American equities, European equities, Far Eastern equities, Japanese equities, emerging markets equities, UK fixed interest, overseas fixed interest, commodities, hedge funds and cash) was first highlighted by the academic, Gary Brinson in 1986 who concluded that as much as 90% of a portfolio’s long term performance is down to asset allocation.

By studying the relationships between the various asset classes one can build a portfolio that smoothes out market volatility and should, within various risk categories, provide the greatest returns for the least risk. Adherence to ‘efficient models’ is very much part of modern portfolio theory and integral to our investment process.