CONSUMPTION BASED FUNDAMENTAL ASSET ALLOCATION (CFAA)
There are two things you can do with money, spend it or save it. We believe that the primary reason people save or invest their money is to give them the capability of spending it in the future. Therefore, our asset allocation is based on consumption and global spending habits, not style-boxes.
Consumption Based Fundamental Asset Allocation (CFAA) introduces a new generation of asset management methodologies which utilize fundamental attributes of the Investor, not the investment, as the primary determinant for all asset allocation decisions. Placing the Investor at the center of the asset allocation process shouldn't be such a radical concept; however, most prevailing strategies use the attributes of the investment to determine how the asset allocation of the portfolio breaks out (i.e. market capitalization, growth, value, etc...).
The goal of Consumption Based Fundamental Asset Allocation (CFAA) is to give Investors the capability to meet their future spending needs and desired quality of life. To provide them with this capability fulfills their primary need for investing and gives Investors financial confidence. This is the core deliverable for all asset managers and requires that we focus directly on the Investors’ spending behavior.
