IMPORTANCE OF ASSET ALLOCATION POLICY TO PORTFOLIO PERFORMANCE: LITERATURE REVIEW

Every investor has the problems that how to invest their wealth in different investment opportunity. Assets allocation policy means that to allocate and invest the individual investors’ funds in different investment opportunity such as common stocks, preferred stocks, mutual funds, pension funds and equity funds. The asset allocation policy will provide the full information to investors about allocation of assets. So, the policy statement has the great impact in the portfolio performance. Without proper policy statement of assets allocation, a single investor cannot achieve his goals and objectives of investing the funds in portfolio because in policy statement the individual investor show the investment objectives and constraints. The investors show in policy statement about risk and returns in the portfolio.