The current market environment is characterized by interest rates near historical lows, yields on longer-term bonds under pressure from inflation, and rising stock valuations. These issues inevitably impact the performance of the respective asset classes.
With market conditions remaining difficult and unlikely to change, what can clients do to augment the return of their portfolio without taking on undue amounts of risk?
Look across asset classes
One strategy that promises attractive return potential even during this challenging market phase is the fundamental cross-asset approach. Such an approach zeroes in on valuation discrepancies across the whole capital structure of attractive companies – from senior bonds and subordinated bonds to convertible bonds and equities.
Investment solutions for the current climate
Unconstrained solutions that are able to find opportunities across asset classes can be a good fit for the current environment. As markets move, prices can shift away from their fundamental underpinnings. A clever and rigorous active approach can exploit these differences to the benefit of the investor.