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Developing an Asset Allocation Strategy 

Developing a customized asset allocation around your unique return goals balanced against your tolerance for downside risk.

Market conditions can determine the choice of strategy

Certain asset classes can be appropriate under different circumstances or for different investment objectives


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Catastrophe

Cash
U.S. IG fixed income
Commodities
Hedge funds
Managed futures


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Income

U.S. IG bonds
U.S. high-yield fixed income
International bonds (DM/EM)
Large/Mid cap equity
DM equity
Real estate

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Volatility

U.S. IG fixed income
DM fixed income
Hedge funds
Managed futures


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Liquidity

Cash
U.S. IG fixed income
DM fixed income
Large cap equity
DM equity


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Inflation

TIPS or short-term fixed income
DM bonds
Domestic equity
International equity (DM/EM)
Real estate
Commodities


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Growth

U.S. high-yield fixed income
EM fixed income
U.S. equity
International equity (DM/EM)
Real estate
Private equity

































Source: Wells Fargo Investment Institute, as of December 31, 2020. IG = investment grade, DM = developed market, EM = emerging market, TIPS = treasury inflation-protected securities.

Hedge Funds, Managed Futures, Real Estate, and Private Equity funds are not suitable for all investors and are only open to “accredited” or “qualified” investors within the meaning of U.S. securities laws. Equity, fixed income, foreign, cash alternatives, and alternative investments are materially different investments with materially different risk and reward characteristics. These risk and reward characteristics should be evaluated carefully before making any investment decision.

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