A comparative study of asset allocation strategies employed in private and corporate banking investments

Abstract

While undergoing an investment process, one of the steps that financial professionals have to undergo is asset allocation. This is one of the decisions that financial advisors constantly must make. Different clients have different risk attitudes and different investment preferences, and therefore different asset allocations would be required to reach the different objectives. This study aims to examine trends that evolve by the way in which asset management decisions are made, in several scenarios. These scenarios represent different characteristics that the clients could have, both on the individual and corporate level. They could also represent different market trends that might occur during the investment period. This study also attempts to evaluate the different strategies that are used in the asset allocation process and that incorporate the investors’ characteristics in undertaking this procedure. The scope is not to focus on the result itself, but rather to evaluate the different strategies that different investment banks situated in Malta employ in attaining the optimal portfolio. A number of interviews with investment professionals were held in order to obtain the necessary data, which was then evaluated and compared to obtain the research objectives.