Adopt a new vantage point for diversifying your portfolio

In an environment characterised by shorter and more divergent economic cycles and the accompanying market volatility, we expect increased dispersion within asset classes and greater differentiation among countries and companies. Against this backdrop, investors need flexibility and diversification in their asset allocations to adapt to changing market conditions and exploit dislocations as they arise.

In 2022 and for a significant part of 2023, the market narrative was driven largely by persistently higher inflation, forcing the major global central banks to hike interest rates. In this macro scenario, the negative returns that many fixed income assets delivered, combined with their higher correlation with equities, brought into focus the lack of adequate diversification in many portfolios’ fixed income allocations.