Which investor type is least likely to use an asset-only asset allocation approach?

Defined benefit pension plans are least likely to use an asset-only asset allocation approach because they are primarily focused on meeting specific liabilities, such as paying out defined benefits to retirees. This type of asset allocation takes into account the current and future obligations that must be met, aligning investments more closely with the duration and cash flow needs of those liabilities.

Unlike an asset-only approach, which focuses on the characteristics and expected returns of the assets without explicitly considering liabilities, defined benefit plans necessitate a liability-aware strategy. In contrast, individual investors, foundations and endowments, and sovereign wealth funds might utilize an asset-only approach to focus on maximizing returns across their portfolio without the immediate pressures of specific liabilities driving their investment decisions.