Prospect of recession points towards new mix of assets
In a changing macro environment, we explore the need for genuinely diversified strategies with flexible asset allocation.
The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not a guide to future results.
Well known among investors, potential headwinds cloud the horizon in recent years. Portfolio diversification could be a good way to moderate risks without necessarily sacrificing returns particularly during turbulent times.
Yet, many funds claim to be diversified. Most multi asset funds indeed offer only a basic mix of equities, bonds and cash. That risks leaving investors exposed in a world where expected equity and bond returns have fallen and appear to be more closely correlated.