Q: What is Strategic Asset Allocation (SAA) and Tactical Asset Allocation (TAA)?

Asset allocation is the percentage value allocated to each asset type in a portfolio of assets. Asset types typically include shares (domestic or international), property, bonds and cash.   

Strategic Asset Allocation

Strategic Asset Allocation, or SAA for short, is a plan used for long-term investing. It’s about splitting your investment money into different types of assets, like cash, stocks (shares), or bonds.

For instance, a high-growth fund might have 85% of its money in stocks because they can earn more over time, even though they come with more risk. On the other hand, the same fund might put less money into cash and bonds because they’re safer but might earn less.

Affecting the strategic asset allocation decision are things like:

  • risk tolerance
  • time horizon
  • and investment objectives 

Strategic asset allocation is a plan representing the investor or fund’s best chance of reaching their goals, with a risk profile they feel comfortable with. 

The asset classes Nucleus Wealth invests in are cash & term deposits, bonds, Australian shares, and international shares. 

Below is an illustration of the Nucleus Wealth Tactical Growth investment’s strategic asset allocation.

Nucleus Wealth Tactical Growth – Strategic Asset Allocation



Tactical Asset Allocation

While Strategic Asset Allocation is a long-term plan based on your goals, Tactical Asset Allocation (or TAA) is a short-term strategy. It’s about making small changes based on things happening in the market right now, like a sudden drop in stock prices or economic changes.

Nucleus Wealth has some investments that use this approach — you can recognize them by the word ‘Tactical’ in their name. They try to get higher returns by using both long-term and short-term strategies.

Most investment plans have a long-term strategy, but not all use short-term ones.

How to determine your asset allocation

To assist you in determining your strategic asset allocation, Nucleus Wealth has a Limited Advice option. We will ask you a number of questions to understand your risk and income requirements. It then uses this to recommend an appropriate strategic asset allocation for your Nucleus Wealth investment.

The system only considers your investment at Nucleus Wealth. However, you are welcome to take the documents (which will be emailed to you) to discuss with an external adviser or accountant. If you are unsure, give us a call on 1300 623 863, or email us at contact@nucleuswealth.com.

// //