Strategic asset allocation

Adaptive Valuation Strategies is our own distinctive strategic asset allocation methodology, which we use to customize a long-term investment plan for you.

By assembling an appropriate mix of equities, fixed income, cash, and other asset classes, you can potentially enhance your core portfolio’s returns and help manage risk.

Adaptive Valuation Strategies (AVS) is Citi Private Bank’s own distinctive strategic asset allocation methodology, which is built upon key principles from our Investment Philosophy.

AVS’s aim is to maximize your returns given the amount of risk you are willing to take.

Our investment process therefore begins by gaining an understanding of your return goals, risk tolerance, and your liquidity, geographic, and currency preferences.

We then customize a long-term plan – or strategic asset allocation – to pursue your goals.

AVS has five levels of allocation according to how much risk you are willing to take on.

Having established an appropriate long-term plan for you, we make tactical adjustments to it, based on the outlook for the next 12 to 18 months.

We can then implement your allocation by building you a core portfolio, using strategies from our own discretionary managers and third-party managers, as well as capital markets strategies.

The long-term plan we create for you highlights what we believe to be the optimal course for pursuing your investment goals in your core portfolio.

Paisan Limratanamongkol
Head of Global Asset Allocation and Quantitative Research

How Adaptive Valuation Strategies work

Built on solid investment principles
AVS is an objective and systematic methodology for strategic asset allocation.

It is built upon principles established through academic research and proven in practice, and which help form our Investment Philosophy.

These include global multi-asset class diversification, the discipline of regular portfolio rebalancing, and staying fully invested for the long term.

Forward-looking returns
AVS estimates annualized returns, called Strategic Return Estimates (SREs), over a ten-year horizon.

SREs are based on valuations and other fundamentals.

When an asset class valuation is expensive or cheap compared to its long-term average, AVS lowers or raises its SRE respectively.

This is because low valuations have tended to give way to high subsequent returns and high valuations to low returns.

A lower SRE will likely lead AVS to recommend a smaller allocation to an asset class, and a higher SRE to a larger allocation.

Specialized treatment of risk
We believe the most meaningful risk for investors is that of an allocation suffering severe losses during a crisis.

Traditional asset allocation methodologies have often failed to anticipate the frequency and severity of such losses.

AVS therefore uses a specialized measure of risk called Extreme Downside Risk (EDR), which draws upon many decades of asset class history to highlight the risks you may face.

There is a close relationship between SREs and EDRs: higher returns come with higher risks attached.

Meet our people

Global Head

Paisan Limratanamongkol

Head of Global Asset Allocation and Quantitative Research

Paisan has responsibility for our quantitative asset allocation models and research and contributes to related thought leadership. He joined the Private Bank in 2013 to help build a quantitative stock selection model.

Previously, Paisan was a quantitative equity portfolio manager and researcher at BlackRock, where was responsible for stock selection modeling as well as managing index portfolios. Before that, he was a partner at Thunder Bay Capital Management, overseeing statistical arbitrage and asset allocation.

Paisan holds a bachelor’s in computer engineering from Chulalongkorn University, Thailand, an MBA from Thammasat University and a PhD with a concentration in finance from the Kenan-Flagler School, University of North Carolina at Chapel Hill.


Mid-Year Wealth Outlook 2023

While our asset allocation strategy remains defensive, investors should consider staying invested and modify portfolios over time.

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