As assets plummeted in value during 2008, David North says he began to doubt the value of asset allocation techniques.

“The conventional proposition is that if equities do well, then fixed income does badly,” says North, who is head of asset allocation at Legal & General Investment Management. “But last year there was an increased correlation of assets, and fixed income did almost as poorly as equities. This led to the question: was asset allocation dead? Increased correlation constrained my ability to move between assets. So could I add value by asset allocation?”