Traditional capital-based
Risk-based allocation
Equities
Bonds
60%
40%
10%
90%
50%
50%
25%
75%
Action:
Allocate portfolio
1
capital
(% of USD value)
2
Result:
Allocate portfolio
risk
(% of volatility)
1
Action:
Allocate portfolio
risk
(% of volatility)
2
Result:
Allocate portfolio
capital
(% of USD value)