Investment strategy D&AA
If you would like to steer the asset allocation of your portfolio according to your own particular objectives, Societe Generale’s financial engineers have, alongside private bankers, created a dynamic reallocation method.
Completely unique in the world of private banking and available exclusively to Societe Generale Private Banking’s clients, this Dialogue and Asset Allocation method consists of:
- Analysing the past behaviour of the market
- Simulating the probable evolution of your portfolio according to its composition – a new, original and efficient technique
Thousands of possible scenarios
The Dialogue and Asset Allocation method allows you to take stock of your investments.
It focuses on nine main asset classes whose behaviour have been analysed via hundreds of indexes and over long periods of time, covering several market cycles. From this stems the “D&AA” indexes.
Thanks to its indexes, the D&AA method makes it possible to generate thousands of possible scenarios for each asset class.
Analysing to better understand
The Dialogue & Asset Allocation method takes place in two stages. The first stage involves a diagnosis of your portfolio in order to assess its risk exposure and performance potential:
- First, linking each line of your portfolio to one of the D&AA indexes
- Then, inferring its likely future behaviour
The D&AA report allows you to understand not only the medium-term (five years) behaviour of your portfolio but also its short-term behaviour (one year). As well as indicating the limits of your portfolio’s evolution given normal changes in the markets, it will also present you with 'extreme changes' scenario, in order to flag up maximum potential losses. Such an analysis will allow you to confirm your asset allocation, and give you a better understanding of its characteristics.
Simulation to take decision
The second step of the D&AA method involves a simulated reallocation of your portfolio:
- First, creating simulations by changing your current asset allocation or integrating new assets
- Then, choosing the strategy you believe to be most appropriate
These simulations are consistent with scenarios used during the first stage, and will therefore enable you to reallocate your portfolio in a consistent and constructive way. You will, for instance, be able to test the inclusion of a new asset class, or take into account assets not included in your current portfolio.
