The process of defining the broad categories or classes of assets that will form the foundation of one's portfolio, and what percentage of the total portfolio each asset class will account for. Broad asset classes include Stock, Bonds, International and Cash.
Historical data is used in an attempt to determine how an asset class has performed and is likely to perform over long periods of time. The goal is not to "beat" the market, but to establish a long-term investment strategy using a core mix of asset classes.
The composition of an asset mix within a portfolio, constructed with the objective of meeting the long-term liabilities of a fund, rather than being based on short-term views of relative performance of the various asset classes.
A portfolio with an asset mix aimed at covering long term liability of a fund, rather than aiming to achieve short term gains.
The composition of the asset mix within a portfolio, constructed with the objective of meeting the long-term views of relative performance of the various asset classes. Usually a benchmark is derived in this fashion. See also Asset Allocation, Tactical Asset Allocation.
The choice of assets to be held in a client portfolio and the limits set on the weightings by the client.