Comment by workworkwork71

For sure! Let's take a pension fund as an example. When asset managers are looking at getting the returns to meet future obligations they are not simply looking at a simple formula of risk-adjusted returns. What they're actually doing is combining factors such as liquidity, time-horizon, hedging across multiple countries, geographies and (most importantly) asset classes. All of that is to say that they need to be sure that on date "X" they are able to meet forecasted obligation "Y".

That's the approach we've taken here. Pooling capital market expectations for 30+ global asset classes and taking into consideration the risk basis, time horizon, the financial goal (ie. is this a general wealth building portfolio or your retirement fund) and then yes, creating rules & heuristics around the type of asset classes that are appropriate for that unique situation. Then as the portfolio ages and your "path" matures (we use a glidepath structure to maintain a volatility cap over the lifetime of the portfolio), the portfolio dynamically adjusts the risk downwards and into a less volatile portfolio that favors capital preservation over accumulation.

All that is done through publicly traded ETFs that represent the asset classes but it's more granular then the way you typed it out. Rather then just being "large cap" it would be "US Large Cap", "ex-US Large Cap", "European Large Cap", "APAC Large Cap", etc. It's not just about risk though, with the most obvious modern example being crypto. Most advisors in 2025 are saying 2.5-5% of a portfolio can go into the asset class but does that make sense if you're investing for a down payment on a house in 5 years? You're going to want higher returning assets that are less volatile like infrastructure equity or private credit (same return profile, less volatile).

The net result is far greater risk adjusted returns and likelihood of actually achieving your financial goals because you've built your overall portfolio piece by piece with the goals as the building blocks.