Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JWM
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • LinkedIn
  • Twitter

User menu

  • Sample our Content
  • Subscribe Now
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Wealth Management
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Subscribe Now
  • Log in
The Journal of Wealth Management

The Journal of Wealth Management

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JWM
    • Editorial Board
    • Published Ahead of Print (PAP)
  • LinkedIn
  • Twitter
Article

Asset Allocation with Shadow Assets

Bernd Scherer
The Journal of Wealth Management Winter 2012, 15 (3) 30-35; DOI: https://doi.org/10.3905/jwm.2012.15.3.030
Bernd Scherer
is a professor of finance at EDHEC Business School in London, UK and CIO at FTC Capital in Vienna, Austria.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: bernd.scherer@edhec.edu
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.
Don’t have access? Sign up today to begin your trial to the PMR platform 

Abstract

The wealth of most investors contains both financial assets as well as nonfinancial assets. The author defines shadow assets as (mostly) nonfinancial and nontradable assets that are exogenous to the investor’s asset allocation decision, such as human capital, nonfinancial sovereign assets (e.g., underground oil reserves), the present value of future alumni contributions for university endowments, or the nonlisted family business for the client of a family office.

Ignoring shadow assets is unfortunate, as it is the existence and nature of shadow assets that distinguishes private investors, university endowments, sovereign wealth funds, and family offices and hence leads to different demands for risky securities. Shadow assets influence the outcome of asset allocation decisions via their covariance with financial assets and their effect on total wealth. Adding shadow assets has two effects on investors: It makes investors more aggressive and can create demand for hedges. Investment advice in the client’s best interests needs to incorporate shadow assets as well as shadow liabilities, as optimal allocations differ considerably when shadow components are properly accounted for

  • © 2010 Pageant Media Ltd
View Full Text

Don’t have access? Register today to begin unrestricted access to our database of research.

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Wealth Management: 15 (3)
The Journal of Wealth Management
Vol. 15, Issue 3
Winter 2012
  • Table of Contents
  • Index by author
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Wealth Management.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Asset Allocation with Shadow Assets
(Your Name) has sent you a message from The Journal of Wealth Management
(Your Name) thought you would like to see the The Journal of Wealth Management web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Asset Allocation with Shadow Assets
Bernd Scherer
The Journal of Wealth Management Oct 2012, 15 (3) 30-35; DOI: 10.3905/jwm.2012.15.3.030

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Asset Allocation with Shadow Assets
Bernd Scherer
The Journal of Wealth Management Oct 2012, 15 (3) 30-35; DOI: 10.3905/jwm.2012.15.3.030
del.icio.us logo Digg logo Reddit logo Twitter logo CiteULike logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • OPTIMAL ASSET ALLOCATION WITH SHADOW ASSETS
    • ASSET LIABILITY MANAGEMENT WITH SHADOW ASSET
    • THE COSTS OF IGNORING ADVICE
    • CONCLUSION
    • APPENDIX A
    • APPENDIX B
    • APPENDIX C
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • Risk Capacity over the Life Cycle: The Role of Human Capital, High Priority Goals, and Discretionary Wealth
  • The Influence of a Family Business * on Portfolio Management: An Asset-Liability Management Approach
  • Google Scholar

More in this TOC Section

  • Well-Being Advisers
  • Editor’s Letter
  • Editor’s Letter
Show more Article
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • LinkedIn
  • Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2021 Pageant Media Ltd | All Rights Reserved | ISSN: 1534-7524 | E-ISSN: 2374-1368

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy