The TIGER 21 Asset Allocation Report for the fourth quarter of 2016 shows an increase in Members’ allocation to Real Estate, with corresponding declines in allocations to Hedge Funds and Private Equity.
The report measures the aggregate asset allocation exposures of our Members based upon their Portfolio Defense presentations. This data is collected over the course of the year and reports are issued on a quarterly basis. To ensure a more meaningful asset allocation representation, the collective data is represented in year over year format as stated at the end of each quarter.
The data has more relevance as it changes over time than it does at any one point in time, and the changes chronicled over time are far more accurate in reflecting changes in our Members’ allocations than is any one data point.
Real Estate showed very strong interest over the fourth quarter, increasing by two percentage points. While starting 2016 out at 25% of assets, current allocations have increased to 30%. This matches the peak levels in this asset class also seen in the second quarter of 2015.
Of all the various assets that TIGER 21 Members typically own, a relatively large percentage of Members have created their wealth in the real estate business and continue to own significant real estate portfolios.
Assets allocated to Hedge Funds and Private Equity both declined by one percentage point for the quarter, to levels of 6% and 21% respectively. At 6%, Hedge Fund allocations have not been this low since the third quarter of 2014. The lowest this allocation has dropped was to just 5%, which was seen back in the 4th quarter of 2008.
At 21%, Private Equity is at a slightly lower allocation level than the rest of the year, but generally higher than most allocation levels seen of the asset class. Since the start of 2016, this asset class has trended between 22% and 23%, dipping just below that for the fourth quarter. Allocations to Cash, Currencies, Commodities, Fixed Income, and Public Equities did not change from the previous quarter.
Chart 1 details the mean allocations across the asset classes from the beginning of the first quarter of 2016 to the end of the fourth quarter of 2016. Chart 2 shows the change in asset allocation percentage on a year over year basis for the past twelve quarters, from the beginning of the first quarter 2014 and ending at the close of the fourth quarter 2016. Chart 3 shows the historic calendar year average allocations, starting in 2007, when we first began tracking this data, through 2016.
TIGER 21 Research
Collective Intelligence®: Enhancing Results, Enriching Lives
These materials should not be interpreted as a recommendation or opinion by TIGER 21 that you should make any purchase or sale or participate in any transaction. TIGER 21 does not guarantee the accuracy of or endorse the views or opinions given by the authors of these materials. TIGER 21 will not be liable for any errors or inaccuracies in such materials, or for any actions taken in reliance thereon. TIGER 21 is not a registered investment adviser or broker-dealer and does not provide investment advice or recommendations to buy or sell securities, to hire any investment adviser or to pursue any investment or trading strategy.