In this semi-annual note, our Multi-Asset Solutions team share their outlook for various asset classes and the drivers of their positioning for markets ahead.
In the first half of 2018, so far, we have seen volatility return to markets, a breach of the much anticipated 3% handle for 10-year US Treasuries, and an agreed summit between North and South Korea. As we continue to tread later into this cycle, investors seeking a consistent long-term real return must balance the need for returns with capital preservation.
In this environment, the risk allocation conundrum remains, particularly as there is an increasing acceptance that we are at a multi-decade inflection point in long term yields.
Changes in regimes - such as this - will add to volatility (and opportunities) and likely play a greater role in influencing investors’ asset allocation decisions.