Over the past few decades, the negative correlation between equities and bonds, as well as low valuations (that have expanded) and high yields (that have declined), has led to strong returns for investors in most balanced portfolios, such as the traditional “60/40” approaches consisting of 60% equity and 40% bonds. Currently many stock markets stand close to all-time highs, while bond yields are very low by historic standards, largely as a result of quantitative easing.
We believe that diversification is always a crucial consideration for investors. But it appears particularly pressing at present. In developed markets, inflation and interest rates are creeping up.
Interest in private markets has grown rapidly among investors, particularly within an environment of historically low interest rates and market volatility.
Emerging markets are major contributors to global growth, and over the past few years emerging market debt has gained even more traction as an asset class.
Today’s investment decisions are shaping tomorrow’s world – please share your views.