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					Asset Allocation Views
July 1, 2008 UPDATE Consumers were spending their tax rebates right on schedule, raising retail sales in May. Higher gasoline prices, however, now threaten to cancel out the stimulus provided by the rebates. GDP growth is likely to decelerate in 2H as the stimulus from the rebates wears off and higher energy costs dampen consumer spending. Bond and futures markets priced in a series of future rate hikes after Fed Chairman Ben Bernanke warned about inflation in a speech in early June. Fed officials have since signaled that they believe the markets have priced in too much tightening too soon. Before tightening, the Fed will want to wait until it can determine whether the boost to the economy from the fiscal stimulus package and past monetary easing will last into the third and fourth quarters of this year, and how much damage $141 per barrel oil has done to the economy, in our view. Commodity prices and weakness in the dollar are putting upward pressure on headline consumer price inflation. There is no evidence yet, however, that a wage-price spiral is developing that would raise core inflation.
For more information, please contact: Brian Gendreau, Ph.D. Investment Strategist 212.309.8276 brian.gendreau@inginvestment.com Paul Zemsky, CFA Head of Multi-Asset Strategies and Solutions 212.309.1798 paul.zemsky@inginvestment.com Nora Omarova Senior Quantitative Analyst 212.309.6582 eleonora.omarova@inginvestment.com Rachael M. Camargo Portfolio Specialist 212.309.1734 rachael.camargo@inginvestment.com

After rising over 12% from its low in early March, when concerns about a recession and financial system instability were at the fore, sentiment has taken a turn for the worse in the U.S. stock market. It will likely take lower oil prices and a rebound in growth for the market to rally from current levels. On July 1 we moved back to neutral in U.S. large-cap, mid-cap, and smallcap stocks and raised our allocation to bonds to neutral. With the market being driven by oil prices, overweight equity positions are vulnerable to a rise in oil prices, and underweight positions risk missing any gains that occur if oil prices fall. GDP growth in the eurozone, the U.K. and Japan is decelerating. The ECB, meanwhile, has signaled that it is inclined toward a one-off raise in policy rates in July to dampen inflation expectations. With rising risks to both growth and inflation abroad we choose to maintain our neutral position in international equities.
Current Positions
Benchmark (%) 65.0 35.0 0.0 Recommended Allocation (%) 65.0 Neutral 35.0 Neutral 0.0 Neutral Change from Last Move Reduced Raised Unchanged

Stocks Bonds Cash Domestic stocks Large-cap core stocks Large-cap growth stocks Large-cap value stocks Mid-cap stocks Small-cap stocks International Stocks EAFE stocks Total stocks

Allocation among stocks
18.0 13.5 13.5 4.0 6.0 10.0 65.0 18.0 Neutral 13.5 Neutral 13.5 Neutral 4.0 Neutral 6.0 Neutral 10.0 Neutral 65.0 Reduced Unchanged Unchanged Raised Raised Unchanged

Please refer to important disclosures at the end of this report.

July 1, 2008

ING’s Asset Allocation Platform
ING provides a fully integrated strategic planning and management service. Through mutual funds, collective trust funds or separate accounts, ING offers investment opportunities in domestic and international equities, fixed income, and short-term money market instruments. ING first offered asset allocation services to investors in the early 1980s. The major objectives of the program, which have remained unchanged, are: A customizable approach that can meet the unique needs of each client Active asset allocation at the strategic and tactical levels A fully integrated program capable of managing all of an investor’s assets or provide a complement to other managers’ capabilities or styles A rebalancing discipline that keeps the client’s portfolio in balance without incurring inordinate trading costs We adopt a disciplined and transparent investment process that uses rigorous quantitative analyses in support of the investment judgment of seasoned professionals.

Asset Allocation Committee Members Rick Nelson Chief Investment Officer Paul Zemsky, CFA Head of Multi-Asset Strategies and Solutions Omar Aguilar, Ph.D. Head of Quantitative Equity Research Robert Browne Head of Proprietary Investments Christopher Corapi Head of Fundamental Equity Brian Gendreau, Ph.D. Investment Strategist Martin Jansen Senior Portfolio Specialist – International Equities James Kauffmann Head of Fixed Income Gene Lancaric, CFA Senior Portfolio Manager Uri Landesman Head of International Equity

This report does not make any recommendation about your investments, and this information should not be considered investment advice. Any opinions expressed herein reflect our judgment at this date and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels and (4) increasing levels of loan defaults.

Please refer to important disclosures at the end of this report.

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