Bridging Financial Planning and Factor Investing with Northern Trust's Peter Mladina
Excess Returns
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The Importance of Optimized Goal Funding
Ashvin Chabra: The idea of optimal goal funding with two sub portfolios, duration, high grade, duration aligned, high grade bonds, and then sort of a return seeking risky asset portfolio. And the total portfolio is efficient under this ICPEM model. If you try to use a curved efficient frontier using traditional MPT, you end up with a situation where the total portfolio may not be optimal,. even if the sub portfolios are. Ashvin ChabRA: So it's intuitive to investors also to think about, Hey, I have these two sub portfolios in this ICP EM, this Inter-Temporal Capital Asset Pricing Model. It rules up to an aggregated optimal total
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