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Tactical portfolio seeks substance and style

TAA portfolio is boldly positioned for the big restart
Tactical portfolio seeks substance and style
  • TAA up 4.4 per cent since January
  • Portfolio is positioned for reopening potential if Covid-19 restrictions ease
  • Inflation remains key risk to this outlook

When I last rebalanced the Tactical Asset Allocation (TAA) portfolio in early January, there was a pro-risk bias. My optimistic view was that economies would open and there would be a strong recovery after the pandemic, so I made the choice to go with a high weighting to equities. Although the delta variant put a significant spanner in the works, that call wasn’t a bad one, the tactical mistake has been one of style not substance.

Overall, the total return from my portfolio since it rebalanced (8 January 2021 to 4 August 2021) has been 4.44 per cent. That’s not a disaster in seven months, but it’s an underperformance of benchmarks such as the PIMFA Private Investor Balanced Index. Over the same period, the PIMFA Balanced index (which is calculated and managed by MSCI) total return was 5.89 per cent.

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