OK, that’s similar to what I’ve heard too (though presumably TAA is more “asset class picking” than stock picking). To me, TAA and DAA are both tactical and dynamic at the same time. So it sounds like you’re saying that the marketers look at TAA as approaching short-term allocation decisions from the opportunity side, whereas DAA approaches it from the risk side. Of course, in the end, good portfolio construction considers both, so TAA and DAA should ultimately boil down to the same thing, except that DAA possibly doesn’t attempt to be opportunistic. The only other difference I’ve seen in my quick Google search is that DAA seems to include things like CPPI, which really is just a risk management technique and has no real place for forward-looking analysis.
Yea, opportunistic vs. risk mgmt. is probably the right way to look at it. …ehh, deleting the second part, I’m just repeating at this point.
I agree with you LP, I think the issue with CPPI is that it is effectively independent of the management style of the portfolio. There’s a risky portfolio that can be managed pretty much any way the manager wants, and the CPPI just rebalances between that and cash to create the option-like insurance contract. Of course, CPPI is more logically consistent with certain strategies. I forget which way it works, but I think it doesn’t work well with mean reverting strategies like value, but it does work with momentum strategies. But I’m a bit rusty on this, and it might be the reverse.
Get on the research side as soon as possible. This role has middle office written all over it.
pawn Wrote: ------------------------------------------------------- > Get on the research side as soon as possible. This > role has middle office written all over it. I’m not really appealed by the research side. Besides, it’s overcrowded, while very few people does and knows about this stuff which is becoming more appreciated. On top of that, this is my first serious job and I like the quantitative skills and knowledge I’ll be able to develop by staying in it for a while. Then we will see.
if its client facing then you should be fine
Regarding TAA and DAA, we treat them differently and it is very confusing IMO. I think it’s just a difference between timeframes. TAA is anything less than six months, DAA is something ranged from 12 to 18 months and then SAA… well…in the long run we’re all dead. I’m not sure about the link between DAA and risk management. I mean - risk management is embedded in the portfolio management and DAA is a medium term asset allocation call. Whether that’s marketing spin or not…well… my take is that SAA is too hard to justify and TAA is too difficult for consultants (I mean, no consultants will spend all their time to look at your portfolio and by the time you enter IC, TAA is already DAA…) so we have DAA. I don’t face clients…I’m the end client across the board. IB wants us for transition job, consultant wants us for advisory job and fund manager wants us to give them money…