Groundlearn / Glossary / Tactical asset allocation
Tactical asset allocation (TAA)
Also called TAA. A CFA term, defined in plain English with the distinction examiners test.
What it means
Short-term deliberate deviation from the strategic allocation to exploit a perceived opportunity.
Where it appears in the syllabus
- Asset AllocationCFA Level III · exam weight 15–20% · Capital market expectations, allocation principles, real-world constraints.
Related terms
- Currency hedgingUsing forwards, futures or options to reduce a portfolio’s exposure to exchange rate movements on foreign assets.
- Efficient frontierThe set of portfolios offering the highest expected return for each level of risk.
- ImmunisationStructuring a bond portfolio so that price and reinvestment effects cancel, locking in a return over a horizon.
- Liability-driven investingManaging a portfolio against the liabilities it must fund rather than against a market index.
- RebalancingTrading back to target weights after market moves have shifted them.
- Reinvestment riskThe risk that coupons and principal must be reinvested at a lower rate than expected.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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