Follow the Smart Money Asset Allocation
Sunday, November 8th, 2009ValidFi submits:
It is well recognized that asset allocation is perhaps the most important determining factor for investment return and risk. Tracking professional money managers’ asset allocations in a timely fashion is thus of great interests. Moreover, being able to track timely smart pros moves is even better.
Various techniques have been used for this purpose. One of widely followed methods is to track mutual funds monthly money flows. This approach could only give us monthly information, which is not exactly very timely in a fast changing market. A more serious problem with this is that it only could tell us how the investors move money among various assets such as equities, fixed incomes and commodities. It does not really reveal what allocations mutual fund managers are making. Furthermore, this would not give us any information how ‘smart’ managers are doing.
