Optimal Assets Allocation For Investors

Asset allocation entails allotting investments among many assets. The target of investors is to minimize risk at a given returns or/and maximize returns at a given risk. The aim of this paper is to compare two asset allocations, Black Litterman model (BLM) and Mean Variance Model (MVM). The data used are groundnut oil, palm oil and palm kernel oil. The data is used to estimate values of risk and returns using both asset allocations to compute risk and return of the three assets. It is observed that BLM minimizes risk and maximizes return of its portfolio better than MVM.