Stocks, Bonds and Portfolio Diversification

Where should you look for uncorrelated returns?

Surely not across bond and equity markets…well, it all depends on how one dissects the data. Some asset managers argue that the diversification benefits of stocks and bonds have not disappeared entirely. They only need re-thinking. Others are adamant that allocators should look elsewhere for diversification benefits.

Is The 60-40 Portfolio Dead Or Just Outdated? (Robeco)

Over the long-term, the 60/40 portfolio structure seems to have paid off rather well. However, there are periods when the reverse is true.

The 60/40 Portfolio & the Benefits of Managed Futures Strategies (PGIM Wadhwani)

CTAs tend to post positive returns even when a 60/40 portfolio is rising. Are these strategies what investors need to diversify their allocations?

Revolutionizing Equity Strategies for a New Frontier (Intech)

For compliance reasons, this paper is only accessible in certain geographies

Over the last few years, traditional equity portfolios have encountered more and more difficulties. Is it time for allocators to rethink their approach to equity allocation?

A Steady Ship In Stormy Waters: Bond Markets In The Spotlight (MFS)

For compliance reasons, this paper is only accessible in certain geographies

Investors are witnessing a significant tightening of lending standards, which invariably feeds through to higher default rates as the economic cycle plays out.

Building Portfolio Agility and Resilience (PGIM)

In this compendium of research, investors can find everything they need to build a resilient portfolio for the current macroeconomic environment.

Diversification: How Diversifying Is It Really? (NISA)

Finding strategies to reduce the impact of equity drawdowns without the corresponding loss in expected return is inherently challenging.

Net Zero Investing And Its Impact On A 60-40 Allocation (Amundi)

For compliance reasons, this paper is NOT accessible in the United States

Strategic asset allocation decisions will need to consider how the transition will impact economic and financial variables, including returns from various assets.

Performance Review: Actively Managed Global Equity Funds (Refinitiv)

Diversifying by allocating to active fund managers is a viable strategy. But manager selection is key. How many active managers have outperformed their benchmark?

FURTHER READING

Crypto and Diversification in Portfolio Allocation (Two Sigma)

One of the more difficult questions to answer for institutional investors within the cryptocurrency space is what the appropriate allocation to the asset class is, if any.

Do Volatility Forecasts Benefit From Range-based Measures? (Lombard Odier IM)

For compliance reasons, this paper is only accessible in certain geographies

Risk-based portfolio construction is directly linked to the ability to build forecasts of volatility and translate them into investment rules. How good are these forecasts?

Will Foreign Investors Return To China’s Bond Market In 2023? (FTSE Russell)

For compliance reasons, this paper is only accessible in certain geographies

Despite reduced foreign participation, Chinese government bonds have shown resilience and outperformed most of their global peers.