4Q 2023 Strategic Investment Outlook

09 November 2023
1 min read

The Allocation Controversies for the Turn of the Year

This short note reviews what we see as some of the key allocation controversies that have come up in recent client meetings and that are likely to underpin flows in coming quarters.

The allocation to private assets is a key point of debate. There has been something of a slowdown in demand for private equity, which we think makes sense. However, we do see a real return and diversification case for flows into private assets more broadly. 

There has been a recent flow back into longer-duration fixed income, given the significant upward move in yields. We do, however, see a split in views about tactical versus strategic duration—especially for government bond allocations.

The past year has been tough for many active strategies. We point out that stock and factor correlations are surprisingly quiescent; in the past, this has often been a good entry point for active strategies to fare better.

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About the Authors

Additional Contributors

Robertas Stancikas, Harjaspreet Mand and Maureen Hughes