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Asset allocation decisions for private banking clients: A China experience
Date Issued
2015
ISSN
1946-6412
1946-6404
Citation
International Review of Accounting, Banking & Finance, 2015, vol. 7(1), pp. 54-72.
Type
Peer Reviewed Journal Article
Abstract
Building on Markowitz's seminar study (1952,) studies on asset allocation decisions by investors typically focus on the efficient frontier from a mean-variance perspective. Given the efficient set, investors shall choose according to their risk-return preference represented by a utility function, typically resulting an asset allocation choice in the form of linear combination between cash, which is riskless, and the ?optimal? combination of risky assets (Tobin, 1958.)This study looks at how different types of investors actually make their asset allocation decisions. Based on evidence obtained from private bankers who manages wealth for High Net Worth Individuals (HNWIs,) and private banking client classification in Chung (2014,) we found evidence which suggests that asset allocation decisions made by this group is rather different from that proposed in the literature.
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