Market Perspectives March 2020
Financial market sell-offs, on concerns over the impact on growth of the spreading coronavirus, dented a strong start to the year and highlighted the attraction of diversified portfolios.
06 March 2020
4 minute read
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: high conviction |
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Fixed income: neutral |
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Developed government bonds: high conviction |
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Investment grade bonds: neutral |
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High yield bonds: low conviction |
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Emerging market bonds: neutral |
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Equities: positive | Positioning in high-quality, growth companies through active management is our preference given our view that in late cycle, alpha (actively selecting superior businesses) outperforms beta (passively following the market). While we remain positive, we have modestly cut our positive view to reflect the growing risks to the economy. Regionally, we see more compelling opportunities in developed market equities where we maintain high conviction, while we remain neutral on emerging market equities from a risk budgeting perspective. However, not all emerging markets are created equally and so warrant selectivity, with Asia appearing to provide more stable (albeit lower) growth than Latin America. |
Developed market equities: high conviction |
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Emerging market equities: neutral |
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Other assets: neutral | Alternative asset classes will continue to provide diversification to our portfolio, but are not expected to be the main drivers of returns. Gold is set to benefit from its status as a safe haven in the late cycle, and for this reason we maintained our allocation to the asset class. Conversely, real estate and alternative trading strategies are underpinned by a weak investment case. |
Commodities: high conviction |
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Real estate: low conviction |
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Alternative trading strategies: low conviction |
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Financial market sell-offs, on concerns over the impact on growth of the spreading coronavirus, dented a strong start to the year and highlighted the attraction of diversified portfolios.
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