Diversification: A new look at old methods?

Different asset classes impact your risk-return profile in unique ways

Allocators today need more than ever to take a pragmatic approach towards diversification. Here are some of the latest and most thought-provoking insights into portfolio diversification with a range of asset classes.

Catastrophe Bonds: Diversification, Performance and Impact (Man Group)

The bonds, which are freely tradable, facilitate the transfer of risk from the insurance market to the capital markets.

Portfolio Diversification with Sukuks (UBS AM)

Over the past decade, the Sukuk bond market has thus metamorphosed from a niche market into a more mainstream asset class.

The Strategic Role of Real Estate in Multi Asset Portfolios (Oxford Economics)

Real estate consistently features in optimal portfolios across different scenarios, underscoring its role as a powerful portfolio diversifier.

Private Real Assets: Diversification and Sustainable Outcomes (Manulife IM)

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

Higher interest rates over the last two years created severe dislocations in the market, putting substantial pressure on commercial property valuations.

The Great Rotation (Verdad)

By setting regional weights according to net income, rather than float-adjusted market cap, investors would also benefit from capturing opportunities in internationally.

The Great Rotation Part 2 (Verdad)

When the United States last exceeded 60% of global market capitalization in the 1960s, the U.S. economy accounted for 40% of global GDP.

U.S. Equity and Sector Relevance in Mexico (S&P Dow Jones Indices)

Incorporating U.S. equities not only potentially offers Mexican investors a way to alleviate domestic sectors biases, it has historically enhanced risk-adjusted returns.

Diversify the Way You Think about Diversification (Vanguard)

For compliance reasons, this paper is only accessible in the United States

A diversified approach that spreads assets across accounts with different tax structures can help reduce some of that risk.

Is Your Bond Portfolio Ready to Take Flight? (Wellington Management)

Bonds have regained their historic role in portfolios and now once again offer a stable source of income alongside downside protection and diversification benefits.