ABSTRACT

Asset allocation is the process of determining the proportion of financial resources available to institutional or corporate funds managers that is to be invested in specific asset classes such as equities, bonds and property. Up to 80% of portfolio results are attributable to asset allocation, as opposed to the specific stock selection process. Given the highly competitive and sophisticated nature of investment management, asset allocation investment strategies by fund managers have become particularly important in recent years. The October 1987 stock market crash emphasized the importance of investment portfolio diversification.