The Smart Portfolios™ Allocation Strategy using TIAA-CREF’s family of 9 funds is structured as a Fund of Funds to capitalize on benefits of diversification. The cornerstone of our strategy is a proprietary advanced asset allocation process known as Dynamic Portfolio Optimization (DPO). DPO is a state-of-the-art asset allocation methodology following Extreme Portfolio Theory to maximize risk-adjusted returns.
Smart Portfolios core objective is to manage risk. Risk is managed using advanced statistical methods that better understand the probability of losing market value. These advanced methodologies are integrated into the firm's DPO asset allocation model. As an asset allocation strategy, constraints are set to maximize the exposure into any one security or asset class with the exception of cash, money market instruments and short term treasuries when more favorable investment opportunities are not available.
Smart Portfolios advanced analytics dynamically adjust risk to meet current market conditions unlike lifestyle and target date funds. This strategy is designed for investors seeking to outperform the major market indices and traditional asset allocation models on a risk-adjusted basis in all economic environments.