MBTI Factors in Asset Allocation

This article explores the MBTI factors in asset allocation and their implications.

Title: MBTI Factors in Asset Allocation and Their Implications

Overall Portfolio Approach (TPA) is gaining prominence in the investment field, favored by global pension funds. TPA evaluates and manages portfolio risk and return from an overall perspective, breaking down asset barriers. Based on TPA, this article constructs the 'MBTI' four factors for asset allocation.

The 'MBTI' four factors are different from the popular MBTI personality test. 'M' stands for 'Macroeconomic', representing correlation with the macro cycle. 'B' is 'Bounce', indicating the rebound amplitude of investment returns compared to drawdowns. 'T' is 'Turnover', representing the size of turnover rate. 'I' is 'Instability', representing the size of annualized volatility.

For different stock industries/styles, correlation with the macro cycle determines medium and long-term trends. In a long time interval, pro-cyclical and counter-cyclical industries show strong hedging properties.

Combining macro context and micro sentiment, pro-cyclical and low turnover rate perform better in the long term.

From the perspective of volatility and Calmar ratio, high volatility and high rebound varieties in stock industry allocation have better returns, while low volatility and high rebound varieties in large-category asset portfolios perform better.

According to multi-asset division, different configuration strategies can be constructed. Three configuration strategies are listed in this article.

Risk Warnings: Overseas geopolitical conflicts have not been resolved; uncertainties in the pace and magnitude of the Federal Reserve's interest rate cuts; various assets and products and individual stocks in the article are only for data collation and do not constitute any investment recommendation.