| Cash and short duration bonds |
- Given the heightened level of uncertainty in financial markets, and to manage portfolio risks, we prefer higher-quality and liquid opportunities.
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| Fixed income |
- More opportunities are popping up in fixed income
- We still favour developed market government bonds as a hedge against any macro volatility
- In credit, the higher-quality segment is preferred, while remaining 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 are cautious on the emerging markets segment.
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| Equities |
- Equities still seem to be 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 bottom-up selection, more opportunities are seen in developed market equities compared to their emerging market peers.
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Alternative trading strategies (ATS)
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- 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 that offer diversification benefits due to their low correlation to equity markets.
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| Commodities |
- 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.
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