Global Tactical Asset Allocation (GTAA) produces demonstrable and significant performance benefits in the investment process – it increases portfolio performance and lowers volatility. By temporary over- and underweighting of investment classes relative to a strategic reference allocation an investment can be coordinated optimally with the cyclic chances and risks on the financial markets. The objective of the GTAA is to increase the sensitivity of a portfolio in relation to financial market risks, if the expected risk premiums are seen as relatively high, and to reduce it, if the risk premiums are expected to be below average. GTAA causes an anticyclical investment behaviour and exercises – technically expressed – dynamic control of the “Beta” of a portfolio.

GTAA is comprised of the control of:
Stocks Bonds Quote
Foreign Currency Allocation
Regional and State Allocation in the Stock Segment
Sector and Style Allocation in the Stock Segment
Duration in the Bond Segment
Credit Risk Allocation in the Bond Segment

The essential decision-making basis for the implementation of a GTTA is time and cross section-consistent short term return prognoses for the investment classes of the portfolio which is to be managed. Modern conditioned investment evaluation models supply qualitatively high-quality prognoses for the GTAA on the basis of a time-variable modelling of the financial market risk premiums. At the Swiss Institute for Banks and Finances of the University of St. Gallen (HSG) investment processes and products in GTAA, developed on the basis of the Vescore developed GLOCAP (Global Conditional Asset pricing) Model, have worked satisfactorily since 1998.

Vescore uses GLOCAP for the customised implementation of individual tactical objectives of institutional customers within the framework of overlay and special fund mandates. Furthermore, GLOCAP steers Asset Allocation from investment funds for the achievement of absolutely positive returns.