Multi-asset portfolio allocation

• Given the ongoing level of uncertainty, and to manage portfolio risks, we still prefer higher-quality and liquid opportunities

• We see increasing opportunities in fixed income
• We maintain a preference for developed market government bonds as a hedge against any macro volatility
• In credit, we prefer the higher-quality segment and remain selective elsewhere
• In high yield, where selection is key, our exposure is relatively low, as spreads have room to widen further in an adverse scenario
• We prefer high yield and emerging market (EM) hard currency debt over EM local currency debt, considering the risk that faces their economies and currencies

• We believe that equities remain relatively more appealing than bonds for long-term investors
• Yet, we are highly selective in our allocation
• In line with our long-term investment philosophy, 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 due to their low correlation to equity markets

• As a risk-mitigating asset, gold remains the only direct commodity exposure held in portfolios

• From a portfolio management perspective, we believe that our risk budget is better spent outside of the asset class