Merrill Lynch introduced a new tactical asset allocation strategy for institutional investors. It is based on a new model, the Merrill Lynch Investment Clock, which notes the current position of the business cycle. The Investment Clock is divided into four phases — defensive growth, cyclical growth, cyclical value and defensive value — and weightings to each asset class in the model will vary depending on which phase the economy is in. The current asset allocation weights stocks 50%, bonds 30%, commodities 5% and cash 15%.
The strategy was created and managed by David Bowers, chief global investment strategist, and his team.
