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Multi-asset portfolio allocation

15 November 2021

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 portfolios’ risks, we maintain a preference for higher quality and liquid opportunities.
Fixed income
Neutral
  • 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 the equity space
  • 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
  • We see limited 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.

Outlook 2022

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Outlook 2022

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