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Multi-asset portfolio allocation

03 May 2024

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.

Multi-asset portfolio allocation.

Cash and short duration bonds

  • Recent additions to shorter dated bonds reflect less perceived risk-reward in equity markets and the continued inversion of the yield curve.

Fixed income

  • Value is seen in developed market government bonds, which can also hedge against macroeconomic volatility.
  • In credit, the higher-quality segment is preferred, driven by what is considered to be better relative value.
  • Exposure is relatively low in high yield, where selection is key, as spreads have room to widen in an adverse scenario.

Equities

  • 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 found in developed market equities compared to those in emerging markets. 

Alternative trading strategies (ATS)

  • There are a limited number of opportunities in the ATS universe, as the cost/benefit trade-off can be challenging.
  • Our focus is on strategies that offer low correlations to equity markets, so providing diversification benefits.

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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