Thank you Rob, for making such a compelling argument for GTAA (Global Tactical Asset Allocation) strategies. Research Affiliates has an interesting solution, but there are others investors should consider as a supplement and for strategy diversification.
The Risk Managed Core Diversifier (RMCD) strategy index is one alternative to Mr. Arnott’s Pimco offering. RMCD is a unique “outcome-oriented solution” that aims to solve two investment problems:
1) Non-core exposures can underperform core exposures significantly in the short and medium term (i.e. 2006, 2008, 2012, & 2013).
2) Diversification can disappear when needed the most. In 2008-2009, emerging market equities, REITs, and commodities all lost more than 60%, exacerbating large core equity market losses during the same period.
For more info, visit: http://www.ManagedVolatility.com
Rob Arnott: Q4 2013 Quarterly Update (brainshark.com)
MULTIMEDIA: The past year was an interesting one for investors: Mainstream developed-market stocks did well, while all other asset classes were shunned. Where are the opportunities today?
Managed Volatility Blog 