-
""

Multi-asset portfolio allocation

Multi-asset portfolio allocation

05 September 2022

By Julien Lafargue, London UK, Chief Market Strategist 

Barclays Private Bank discusses asset allocation views within the context of a multi-asset class portfolio. Our views elsewhere in the publication are absolute and within the context of each asset class.

""
Cash and short duration bonds: Positive
  • Given the ongoing uncertainty, and in order to manage portfolio risks, we maintain a preference for higher-quality and liquid opportunities.
Fixed income: Cautious
  • We see only limited opportunities in fixed income
  • We maintain a small preference for developed market government bonds as a hedge against possible macroeconomic volatility
  • In credit, we prefer the higher quality segment, although, as spreads have recovered remarkably from their highs, our risk budget is allocated towards equities
  • In high yield, selection is key, and our exposure is low, given the tightness of spreads. We prefer high yield and emerging market (EM) hard currency debt over EM local currency debt, considering the risk facing their economies and currencies.
Equities: Most positive
  • We believe that equities remain relatively more appealing than bonds in the current environment
  • Yet, we remain highly selective in our allocation
  • In line with our long-term investment philosophy, our portfolios remain geared towards high-quality, cash-generative, and conservatively-capitalised businesses
  • As a function of our bottom-up selection, we currently see more opportunities in developed market equities compared to their emerging peers. 

Alternative trading strategies (ATS): Cautious

  • There are a limited number of opportunities in the ATS space, as the cost/benefit trade-off can be challenging
  • Our focus is on strategies offering diversification benefits thanks to their low-correlation to equity markets.
Commodities: Neutral
  • As a risk-mitigating asset, gold remains the only direct commodity exposure we hold in portfolios
  • From a portfolio management perspective, we believe our risk budget is better spent outside of the asset class.

Related articles

""

Market Perspectives September 2022

Welcome to the latest edition of “Market Perspectives”, the monthly investment strategy update from Barclays Private Bank. With the Russia-Ukraine war raging on, inflation surging, and the risk of recession rearing its ugly head once again, financial markets are grappling with much uncertainty. This month’s report attempts to make sense of it all, providing insight and context behind the major trends at play.

Disclaimer

This communication is general in nature and provided for information/educational purposes only. It does not take into account any specific investment objectives, the financial situation or particular needs of any particular person. It not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful for them to access.

This communication has been prepared by Barclays Private Bank (Barclays) and references to Barclays includes any entity within the Barclays group of companies.

This communication: 

(i) is not research nor a product of the Barclays Research department. Any views expressed in these materials may differ from those of the Barclays Research department. All opinions and estimates are given as of the date of the materials and are subject to change. Barclays is not obliged to inform recipients of these materials of any change to such opinions or estimates;

(ii) is not an offer, an invitation or a recommendation to enter into any product or service and does not constitute a solicitation to buy or sell securities, investment advice or a personal recommendation; 

(iii) is confidential and no part may be reproduced, distributed or transmitted without the prior written permission of Barclays; and

(iv) has not been reviewed or approved by any regulatory authority.

Any past or simulated past performance including back-testing, modelling or scenario analysis, or future projections contained in this communication is no indication as to future performance. No representation is made as to the accuracy of the assumptions made in this communication, or completeness of, any modelling, scenario analysis or back-testing. The value of any investment may also fluctuate as a result of market changes.

Where information in this communication has been obtained from third party sources, we believe those sources to be reliable but we do not guarantee the information’s accuracy and you should note that it may be incomplete or condensed.

Neither Barclays nor any of its directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation.