Much still depends on how well public health and economic authorities deal with the impact of the COVID-19 pandemic and its aftermath.
- So, what are the prospects for the main asset classes over the next five to seven years?
- How should investors deal with even lower interest rates for even longer in developed economies?
- Amid heightened volatility in equities and negative bond yields, where can investors hunt for yield?
We believe investors should continue to build robust portfolios that can withstand negative market developments, but that also deliver sufficient returns over time. This requires:
- Diversification across asset classes, regions and currencies
- Ingenuity in the search for premia and cash flows to enhance returns via, for example, illiquid asset classes.
For our views on the different investment and return opportunities, read
Longer-term asset allocation views: What to expect after the great pandemic of 2020 by Koye Somefun and Daniel Morris
Also listen to the podcast with Koye Somefun and Daniel Morris on this publicvation
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.