Henry Ma, Ph.D., CFA, President and Chief Investment Officer
Executive Summary
After the financial crisis of 2007-2008, there was renewed interest in Tactical Asset Allocation (TAA) as investors searched for better downside risk management solutions. A new class of TAA managers, often referred to as “tactical ETF strategists,” emerged. They develop tactical strategies aiming to provide downside protection while maximizing the upside potential using exchange-traded-funds (ETFs). Driven by investors’ demand, the tactical ETF strategy segment grew dramatically from 2009 to 2014. In this whitepaper, we compare this new segment to the old-style pre-crisis TAA strategies and examine current issues and trends. Further, we discuss how TAA strategies can offer efficient solutions to two of the most pressing issues investors face today: downside protection in a bear market and income generation in a low interest rate environment.
Tactical Asset Allocation in the Age of ETFsDownload Paper