Using our cutting edge portfolio generation tool, Advisers and Wealth Managers can improve their value proposition for end investors.

The Classic Black-litterman Asset Allocation Model
Our portfolio generation model is based upon the Black-Litterman model, which, in turn, is built upon the classic Markowitz model, and takes it one step further:

Starting point (MPT) – Market Equilibrium returns, considering historical returns, level of risk aversion, and the historical correlation between the assets of a given portfolio.

Incorporating individual expectations about assets, along with their corresponding degree of certainty. The inclusion of expectations deepens the analysis, especially when the source of the expectations is reliable. This contrasts with traditional MPT which simply takes historical returns for the portfolio assets.

The revised portfolio’s asset allocation faithfully reflects the subjective views and their degree of certainty, resulting in a more nuance, forward- looking position for clients home.