Question

a client's asset mix changes due to fluctuations in the market, and the receipt of cash and investment income. the client wants the portfolio managed actively, constantly rebalancing it to return the mix to its strategic long-run position. what type of asset allocation is the client requesting?

Answer 1

The client seeks dynamic asset allocation, which involves actively managing the portfolio to return the mix to its strategic long-term position in response to market changes and cash flows.

Step-by-step explanation:

The client is requesting dynamic asset allocation, a strategy that entails constant monitoring and adjusting of the asset mix in response to market fluctuations, cash inflows, and investment income to maintain a strategic long-term balance. This active management approach ensures that the portfolio aligns with the client's investment goals and risk appetite over time. Dynamic asset allocation seeks to capitalize on short-term market movements while adhering to a broader, long-term investment strategy.