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.