Asset allocation theory and practice in Australian investment management

Santacruz, Lujer (2016) Asset allocation theory and practice in Australian investment management. The Journal of Wealth Management, 19 (2). pp. 47-67. ISSN 1534-7524


Asset allocation is the decision on how much of the investment portfolio to place in each of the broad asset classes (e.g. cash, fixed interest securities, property, equities). It is a key decision area in the investment management industry, where professional investors manage pooled investments. This study sought to identify any dichotomy between theory and practice of asset allocation in the Australian investment management industry. It surveyed the available body of research on asset allocation consisting of Modern Portfolio Theory from the seminal Markowitz mean-variance formulation to subsequent research strands and established that academics still believe in their relevance. An online survey among practitioners established that while there is a high level of awareness, there is a low level of usage of asset allocation theory and theory-based methods in the industry. Recommendations mostly revolving around improving the interaction between academe and industry are made that may help reduce the theory-practice dichotomy. Limitations of the study are discussed as well as future areas for related research.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this record cannot be displayed due to copyright restrictions. Companion article to that cited in record #29859.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 17 Oct 2016 05:16
Last Modified: 24 Jan 2019 01:54
Uncontrolled Keywords: asset allocation, modern portfolio theory
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
14 Economics > 1402 Applied Economics > 140207 Financial Economics
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970114 Expanding Knowledge in Economics

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