Insights
Multi-Asset Portfolios: Low Yields, Inflation Risk Ahead
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Global Multi-Asset Viewpoint
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November 30, 2020
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Multi-Asset Portfolios: Low Yields, Inflation Risk Ahead |
Many investors today are questioning the outlook for the traditional 60/40 portfolio for two main reasons: 1) very low yields on most safe haven bonds and thus low expected returns and 2) higher inflation risks emerging— comparable to the previously dominant deflation risks. In this Viewpoint, we focus on enhancements to the traditional 60/40 benchmark that may help mitigate these risks and improve the outlook for 60/40. Investors may be able to enhance returns in various (inflationary, deflationary) environments with similar levels of volatility to a 60/40 portfolio by making the following strategic allocation changes: 1) increasing weights of select higher yielding government bonds and decreasing weights of lower yielding bonds and 2) adding an allocation to a diversified portfolio of inflation protection assets..
For more please download the full report.
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Managing Director
Global Multi-Asset Team
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Head of Global Multi-Asset Team
Global Multi-Asset Team
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