Investment Management: Morgan Stanley Smith Barney Is Now on Risk Off Mode

11/15/2011 0 comments

Morgan Stanley Smith Barney published its latest November viewpoints on portfolio strategies. It stated that the odds of a recession in the U.S. and beyond are “uncomfortably high.”  Here are its tactical changes for portfolios:

 

 

The global cash represents dollars and other currencies. This itself should be treated as an asset class that needs careful management.

Compared with MyPlanIQ's Tactical Asset Allocation(TAA), we are cautious and about 1/3 to 1/2 of full risk asset exposure. Some of our plans reduced risk asset exposures in September, helping to even preserve some gains from risk assets.

See Six Core Asset ETFs that consists of six major asset classes US Stocks (SPY, VTI), International Stocks (EFA, VEU), Emerging Market Stocks (EEM, VWO), REITs (IYR, VNQ), Commodities (DBC, GSG) and Total US Bonds (AGG, BND).

Portfolio Performance Comparison (as of 11/14/2011)

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Six Core Asset ETFs Strategic Asset Allocation Moderate 3% 12% 13% 73% 5% 25%
Six Core Asset ETFs Tactical Asset Allocation Moderate -0% -15% 8% 65% 9% 67%
SPY 6% 4% 13% 23% -0% -9%
VBINX 6% 14% 13% 46% 3% 10%

More details here.

Symbols: SPX, COMP, SPY, VTI, EFA, EEM, VWO, VNQ, IYR, DBC, AGG, Investment Management, Asset Allocation



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