RT Journal Article SR Electronic T1 Asset Allocation: Systemic Liquidity as a Risk Factor JF Trading FD Institutional Investor Journals SP 19 OP 23 VO 2011 IS 1 A1 Sébastien Page A1 Joseph Simonian A1 Fei He YR 2011 UL http://guides.pm-research.com/content/2011/1/19.abstract AB Most investors think of liquidity as a synonym for execution. Indeed, the ability to quickly and easily move in and out of positions is the defining measure of liquidity. But just as the financial crisis proved that asset allocation involves more than toggling between bonds and stocks, a proper examination of portfolio construction reveals that liquidity is also a topdown driver of returns. In this article PIMCO investment professionals examine how liquidity contributes to performance over time and urge investors to treat liquidity as one of the key “risk factors” in their portfolio construction.