2022 was a landmark year for monetary policy, with Central banks shifting priority from supporting growth to taming inflation. As a result, markets tanked amid high inter-asset class correlation levels, potentially questioning the respective attractiveness of equities vs bonds. Besides, absolute return strategies tend to structurally benefit from a high rate context. Is it time to revisit the traditional 60/40 portfolio?
In our paper, we show that introducing the right alternative strategies may enhance the return/risk profile of a balanced portfolio. The 40/30/30 portfolio, with variable allocation adjusted to the economic phases, offers higher performance than the 60/40 portfolio.
The scenarios presented are an estimate of the performance based on evidence from the past on how the value of this investment varies, and/or current market conditions, and are not an exact indicator. What you will get will vary depending on how the market performs ad how long you keep the investment.
What mix of strategies should investors favor in the current environment? That may depend on the scenario.
Find our answers in our white paper
Ready for the next step? We demonstrate a framework for adapting your choice to the market environment.
See our explanation of how to allocate to functional alternatives
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”More than ever, alternative strategies appear as a ‘go-to’ tool to enhance the resilience of balanced portfolios. Our research paper proposes a strategy mix that should help investors navigate the markets, whatever the scenario.
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