Three main themes we believe investors should focus on;
1. Seek diversification at a reasonable price: look for opportunities to add diversification to portfolios to help offset potential higher volatility within traditional assets. In particular, attractive opportunities to add diversification through emerging market debt, Alternatives strategies and allocations to residential and European property.
2. Risk-proof portfolios: while we remain broadly positive on equities over the medium term, we believe valuations across bonds and equities leave markets susceptible to higher volatility going forward. As such, we see a strong rationale for incorporating risk-control strategies into growth portfolios.
3. Sustainability: we expect the focus on sustainability to continue to grow, with potential regulatory and policy responses having wide-ranging investment implications. We have already begun to actively integrate Environmental, Social and Governance (ESG) factors into our investment processes. We are firstly focusing on global equities and property, and will extend to fixed income mandates in 2020. We believe integrating ESG factors into our investment processes helps to mitigate risk and supports long-term sustainable investment returns for investors.