Insights

Tactical Asset Allocation: Our Team and Process

September 18, 2024

ETF Model Portfolio Strategist

Robert W Spencer, CFA

Senior Portfolio Strategist

Learn more about the team that manages the State Street ETF Model Portfolios and the thinking behind their tactical asset allocation process. David Marshall and Robert Spencer discuss how the Investment Solutions Group thinks about investing and the differentiated tactical asset allocation process they bring to our active ETF model portfolios.

To put our asset allocation expertise to work in your portfolios, explore our State Street ETF Model Portfolios or learn more about the Investment Solutions Group.

Transcript

DAVID MARSHALL: What is the thinking and process behind the State Street model portfolios? And who are the team members responsible for this differentiated process? Today we'll be talking about these things. My name is David Marshall. I'm a model portfolio strategist, and I'm joined by Rob Spencer, who's also a strategist. So let's jump right into it, Rob. Tell me more about the team.

ROB SPENCER: Thanks, David. The Investment Solutions Group is the investment team behind the model portfolios at State Street Global Advisors. We're the Multi-Asset Class Team at the firm. We think that asset allocation is arguably a client's most important question and represents one of their greatest opportunities. And our goal is to be that trusted partner to help them think through those questions and evaluate those opportunities.

And with a heritage that dates back to the early 1980s, over 135 people on our team in 10 locations around the world, we think we're very well positioned to help investors, to be that trusted partner. David, How does the Investment Solutions Group think about investing?

DAVID MARSHALL: The overarching beliefs consist of a couple different things. The first thing is that we believe that index and active management can coexist. We believe that diversification matters. Risk matters and expenses matter as well. As it relates to tactical asset allocation, we believe that there are global inefficiencies that exist between asset classes. We also believe that a process that is anchored with a systematic approach can be utilized, but also utilizes discretionary views. And we also believe that there's a lot of information that could be provided from a tactical asset allocation process.

Rob, can you tell us about the process that we utilize?

ROB SPENCER: Absolutely. The tactical investment process involves pulling the levers of asset allocation actively to try to add value above a strategic benchmark. What we’re trying to do is take care or take advantage of some of the mispricing, as you mentioned, that we see among the global asset classes.

But our approach is a little more nuanced. We tend to segment the broad asset class comparisons. Think equities versus bonds, cash, commodities from the intra-asset class or what we refer to as relative value. So within equities — region, country, sector — and rates and credit within fixed income. And the reason we do this, it helps us to be more intentional about how we use those quantitative and discretionary toolkit at our disposal.

DAVID MARSHALL: Well, thanks, Rob. A lot of great information has been provided today. If you want more information, please visit our website.

Disclosure

This video is provided for informational purposes only and should not be considered investment advice or an offer for a particular security or securities. The views and opinions expressed by the speaker are those of his or her own as of the date of the recording, and do not necessarily represent the views of State Street or its affiliates. Any such views are subject to change at any time based upon market or other conditions and State Street disclaims any responsibility to update such views. These views should not be relied on as investment advice, and because investment decisions are based on numerous factors, may not be relied on as an indication of trading intent on behalf of State Street. Neither State Street nor the speaker can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Please consult your tax or financial advisor for additional information concerning your specific situation. This video cannot be used for commercial purposes, and should only be used in the specific countries as restrictions exist with some products and services marketed globally.

The views expressed in this material are the views of David Marshall and Robert Spencer through the period ended September 7, 2023 and are subject to change based on market and other conditions. This material contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Asset allocation is a method of diversification which positions assets among major investment categories. Asset allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss.

Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

Investing involves risk including the risk of loss of principal.

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