The coronavirus has changed everything. We’ve seen a bear market in equities - and then a bull market - with swings of over 20% in both directions. We have witnessed wild currency moves, a plunging oil price and liquidity disappear from fixed income and credit markets.
How should we think about asset allocation in such a fast-moving market environment? We ask Co-Head of Multi-Asset Solutions, Kej Somaia, how objective-based investors can grapple with dispersion of returns between asset classes.
Kej will discuss:
- Overall asset allocation and the breakdown of traditional relationships between defensive and growth assets.
- What we can draw from the past; while history will not provide a playbook, there are lessons to be learnt about turbulence.
- The outlook for inflation for objective-based investors, given markets are tipping recession, while central banks and governments around the world deliver unprecedented stimulus.
- Whether tightening liquidity means investors should change the way they manage portfolios.
- The dislocation opportunities for asset allocators - the commodity we avoid in calmer times, what it would take for us to increase our allocation to equities and why we won’t be sitting the crisis out in cash.
Watch the video below:
This material has been prepared and issued by First Sentier Investors (Australia) IM Ltd (ABN 89 114 194 311, AFSL 289017) (Author). The Author forms part of First Sentier Investors, a global asset management business. First Sentier Investors is ultimately owned by Mitsubishi UFJ Financial Group, Inc (MUFG), a global financial group. A copy of the Financial Services Guide for the Author is available from First Sentier Investors on its website.
This material contains general information only. It is not intended to provide you with financial product advice and does not take into account your objectives, financial situation or needs. Before making an investment decision you should consider, with a financial advisor, whether this information is appropriate in light of your investment needs, objectives and financial situation. Any opinions expressed in this material are the opinions of the Author only and are subject to change without notice. Such opinions are not a recommendation to hold, purchase or sell a particular financial product and may not include all of the information needed to make an investment decision in relation to such a financial product.
To the extent permitted by law, no liability is accepted by MUFG, the Author nor their affiliates for any loss or damage as a result of any reliance on this material. This material contains, or is based upon, information that the Author believes to be accurate and reliable, however neither the Author, MUFG, nor their respective affiliates offer any warranty that it contains no factual errors. No part of this material may be reproduced or transmitted in any form or by any means without the prior written consent of the Author.