Macro volatility remains an important theme for 2023/24, supporting portfolio diversification:
An equity-bond portfolio performed poorly in 2022 because inflation and real interest rates were higher than expected; we believe this remains a material risk in 2023/24, despite the year-to-date rise in equity prices.
Many investors could still benefit from diversifying equity risk. Simple ways of doing so can include investing in hedge funds, alternative credit, and real assets.
David is the Global Head of Asset Research at WTW, responsible for economic and capital market research. He also is a member of the Investment Assumptions Committee, who help guide investment policy globally.