T. Rowe Price, in "Multi-Asset Collaboration and Due Diligence. How we actively monitor and fortify our building blocks," discusses their meticulous due diligence process that ensures the continual suitability of each underlying strategy within their multi-asset portfolios. This approach is
The "Multi-Asset Solutions Strategy Report: Global markets and multi-asset portfolios" by JP Morgan Asset Management presents a cautious global economic outlook amidst recession risks and financial sector stress. While the current data suggests a subtrend global growth and easing inflation
Restoring balance: The case for rebalancing portfolios In 2022, investors were surprised by the lack of diversification benefits in the standard 60/40 portfolio. Both stocks and bonds were affected by the historic inflation surprise and central bank tightening, leading to
MARKET ENVIRONMENT A post-mortem of the investment environment in 2022 needs little discussion, other to conclude that the return of inflation triggered more ratehikes (over 300) across the world than we have seen since 1988 and with it severe losses
Key takeaways 60/40 portfolios have certainly seen better times, having recorded their worst-performing year since 2008. A turbulent 2022, however, could be the precursor for a brighter future especially for investors looking to balance long-term growth of capital, conservation of
This report highlights the evolution of Chinese assets and investors’ allocations to the region. Observation 1 shows that investors outside China have low allocations to the country, with variations depending on their location and investment strategy. Chinese equities and bonds
Inflation is a huge concern. During the pandemic, the surge in demand for durable goods overwhelmed global supply chains struggling with the impact of lockdowns. As much of the world has reopened, the demand for goods and services, such as
New Modeling Techniques to Evaluate Bitcoin in a Multi-Asset Class Portfolio Introduction Investors considering whether to add bitcoin to their multi-asset class portfolio face the challenge of how to think about both the impact of a bitcoin allocation and how
Valuations, now close to their long-term norms after last year’s sell-off, should be less of a headwind for investors in 2023 than in 2022, although global economic growth is slowing on the back of tighter monetary and fiscal …
Abstract Our aim is to develop a very offensive (‘aggressive’) tactical asset allocation strategy, by combining some of our previous models like Protected- (PAA), Vigilant- (VAA) and Defensive (DAA) Asset Allocation. We will call this new strategy the ‘Bold Asset
We continue to operate in extraordinary times. Just as we are emerging to some sense of normality after the pandemic, the world continues to face instability. In the UK, we are experiencing a cost of living crisis and rising inflation.
Multi Asset Monthly: Central banks’ top priority remains the fight against inflation; nevertheless, their communication seems more balanced, indicating that expectations are also being considered. Inflation will moderate in 2023 but we are not close to a pivot. Central banks
Central banks other than the Bank of Japan hiked rates further in Q3 and made clear that the fight against inflation is priority number one. That means hiking fast and keeping rates higher for as long as necessary. An early
Market structure across asset classes is continuously evolving. Consequently, financial markets can be seen as adaptive as the underlying dynamics and interactions between the different actors are not stable through time. These shifts in dynamics in turn impact the risks
2022 has been one of the most volatile periods in recent years for global equity and fixed income markets. The outbreak of the war in Ukraine, global supply chain disruptions, global inflationary pressures, less accommodative central banks and COVID-19 restrictions
The Jackson Hole conference made it clear that fighting inflation, even if it leads to economic hardship, is priority number one for monetary policymakers. Except for the Bank of Japan, central banks will stick to their aggressive tightening path, …
Investors are witnessing unprecedented market conditions. Within a turbulent market environment charaterised by a high inflationary pressure, a shift from global to “glocal” trade patterns and a fading era of cheap energy, how can an active and agile multi asset
Bad news was good news in July. With recession risks becoming more imminent especially for Europe, markets priced in an earlier easing of monetary policy. For the US, rate cuts are priced in as early as end of Q1 2023.
It was a bruising first half of the year for financial market participants, with U.S. and global stocks entering bear market territory while core bonds, generally considered “safe-haven” assets, declined by double digits. Russia’s war on Ukraine continues to warp
Market structure across asset classes is continuously evolving. Consequently, financial markets can be seen as adaptive as the underlying dynamics and interactions between the different actors are not stable through time. These shifts in dynamics in turn impact the risks
Elevated economic uncertainty, rising inflation, and investor expectations of a downshift in global growth from the stellar rebound of 2021 were already underway at the start …
CROSS ASSET Investment Strategy: The current repricing is a reminder of a regime shift in which stagflationary concerns are becoming prominent. Investors should move towards quality segments in credit and equities, and aim to benefit from the regional divergences that
Multi Asset Quarterly Inflation remains the number one topic in the financial markets. Soaring energy prices and persistent supply shortages for a wide range of goods and services are the major drivers of higher prices. Overall, central banks have become
EXECUTIVE SUMMARY Heading into the year, we were bearish and guessed the Fed Put sat between 3,800-4,000. PostUkraine, the strike price is lower. As we began preparing for the 2022 bear market last August, today, we introduce a 10-factor watchlist
Among investors pursuing long-term objectives like retirement, there is an understandable tendency to focus on the accumulation of assets, and the process, while by no means easy, is fairly straightforward, with a limited number of variables to consider. But as
For over two decades, the 60/40 equity-bond portfolio has served investors well as stock prices have risen and interest rates have fallen. However, the simultaneous sell-off in both asset classes this year has challenged this model. Looking ahead, we believe
Multi-Asset Investments Monthly views Given “stagflationary” concerns, our outlook remains cautious, with a preference for quality in developed markets. Stagflation describes a combination of slowing growth and accelerating inflation.
The urgent need for action on climate change and likely policy responces means that investors need to think about carbon in their portfolios. And they need to do so from multiple perspectives.
Just before COP26, we wrote about what net zero means to those responsible for portfolios with multiple asset classes* . In this paper we address the practical aspects for asset owners and investors of getting on the decarbonisation path and
Executive Summary We demonstrate the building blocks for investors who may either be considering allocating to illiquid assets for the first time, or who want to gain a greater understanding of how much capital they should invest in illiquid assets.
Multi-asset market outlook: Commodity prices surged by 36.1% (In US dollars) in the first quarter on the back of widening geopolitical risk premiums and outright supply distortions as the world’s third-largest oil producer, Russia, faced sanctions. As both the level
Clear insights into multi-asset investing, macro and research Key points As our multi-asset franchise, All Roads, reached its 10-year milestone, we applied the investment and research insights gained in the past decade to assess the prevailing risk of Q1 –
Economics • Russia invasion delays recovery. Uncertainty and higher prices weigh on economy. • Price increases continue. Energy and food prices as drivers. Several months of …
The Russian invasion of Ukraine and the subsequent war involving a global military superpower has created significant uncertainty for investors. The condemnation from the rest of the world has been united, backed up with punitive sanctions that most certainly will
Grayscale Research Crypto assets are increasingly becoming a key component of The Postmodern Portfolio. This report looks at the investment thesis for crypto assets, and the role they play within a portfolio, through the lens of Modern Portfolio Theory (MPT).
The dramatic escalation of the Russia-Ukraine crisis is a worrying development with serious macro and market implications. Our asset allocation view has been cautious since late last year and is likely to remain so given the spectre of war in
In the light of rising inflation numbers, central banks have made sharp hawkish shifts. The Fed is now expected to hike rates five times this year and to start rolling off its balance sheet. Even the ECB is expected to
When markets get volatile, it can be tempting to change course. Each crisis, from geopolitical risks to changes in monetary policy, can feel daunting. But rather than trying to predict what happens next, it’s critical for investors to think clearly
Multi Asset Quarterly: The economic growth outlook is strong, driven by a resilient consumer, low inventories and infrastructure spending. The rapid rise in Omicron cases, however, may limit the service sector’s recovery in Q1 and push out the economic normalization
Global Asset Allocation Views – 1Q 2022: It is too early to say with certainty how and when the pandemic will finally retreat. Rapid deployment of restrictions in Europe suggests we are not there yet. But at the same time,
Multi-asset market outlook: Equity markets continued their march higher this month. Neither slowing macro momentum nor increasing infections have hindered this rise and the ‘buy the dip’ strategy continues to be a winner. After a brief dip mid-month, equities …
Multi-asset market outlook: Interest rates seems to have entered a period of consolidation. US rates even moved lower towards the 1.40% level in June. In Europe, most rates kept upwards momentum, but at a much slower pace than in previous
Multi Asset Monthly: Macro data are increasingly heralding the start of the economic normalization process in regions where the vaccine roll-out has been smooth. In the US more infrastructure spending has been announced. Inflation numbers and expectations have risen, but
In the current post Covid-19 recovery phase, we see three main themes that multi-asset investors should focus on: one more tactical, in terms of risk allocation, and two more structural. – First, as the recovery advances, investors should embrace more
While fixed income markets mainly remained under pressure, they were not the worst performing asset class in March. That honor went to commodities. After leading the way over the past months, commodities came under pressure in March. The decline was broad based. Crude oil lost …
At the end of last year, I reflected that you “gotta have faith in low discount rates” for risk assets, such as equities, to continue to perform well in 2021. While on the one hand the economic and earnings recovery from Covid-19 was, and continues to be, more potent than expected, allowing companies to grow-in to elevated multiples; on the other hand, an increase in ultra-cheap capital …
In this latest edition of the Multi Asset Conversations, the team share their thoughts on key currencies and the positive impact the vaccine roll-out has had on the EUR, GBP and USD. They also discuss their views about Emerging Markets, a highly disparate universe where markets need to be treated on their individual merits.
Multi-Asset Conversations – Episode 2 In the second short video in the series Colin Dryburgh discusses the opportunities for growth assets in 2021 and Robert-Jan van der Mark looks at sustainability and how we are seeing opportunities in that area.
In the first of the series Vincent McEntegart gives his thoughts on the broad market expectations for 2021 and Debbie King presents a short case study on how we use bank equity and bank credit in our income strategies to deliver income plus a strong risk-adjusted return.
Markets are entering the new year optimistic about the successful development of vaccines to combat the spread of COVID-19, seeing the news as a light at the end of the dark tunnel that was 2020. The extreme enthusiasm, however, has driven many markets to record highs, extending valuations and creating a rotation toward cheaper stocks in more cyclically …
