We build our discretionary portfolios by applying the best of the asset allocation models and practices carefully combining them together to create our own bespoke approach to optimal asset allocation.
Fusion Asset Allocation is built around a proprietary mix of two models: Behavioural Expected Utility and Budgeted Risk Parity.
Behavioural Expected Utility Model, based on Optimal Portfolio Theory, is close to the approach used by Barclays Wealth in its Global Asset Allocation.
Risk Parity Model is employed by firms like Bridgewater Associates and Goldman Sachs Asset Management. Budgeted Risk Parity introduces risk budgets to asset classes, which reflect typical returns and risk levels associated with various asset classes in prevailing market conditions.
At the second stage of the asset allocation process, we overlay the portfolios with protective strategies, which specifically address the risks of unrecoverable losses. This approach is similar to Offensive Risk Management pioneered by PIMCO, one of the largest fixed-income investment management firms.