Filmed before Kwasi Kwarteng’s mini budget, the team discuss a range of topics from inflation, interest rates and bond markets to duration growth equities vs shorter duration value equities.
Part 1 – What’s been driving markets?
The team discuss what has been driving Markets over the last few months.
They focus on inflation and look at the major causes of it, how central banks are reacting and why growth stocks like technology are so affected by rising interest rates.
Part 2 – Focus on investments
In the second part the team turn their attention to investments and how they believe a cautious but highly diversified portfolio is best suited to this very challenging environment.
Within equities they discuss how they have been tilting away from high duration growth equities to shorter duration value equities, focussing on companies that can pay dividends over multiple cycles that have strong balance sheets. They look more closely at ‘what is a value stock?’ and how history has shown they are more resilient to the effects of inflation than growth stocks.
They conclude by how they find uncorrelated assets and the important role of Alternatives and Diversifying Assets within the portfolio, such as solar infrastructure, which tends to benefit from rising inflation.
Part 3 – Outlook and investment opportunities
The team look ahead, focussing on their outlook for the market and investment opportunities. They explain why they believe for now it is a time for caution but there can be optimism about future returns.
Part 4 – Credit, Fixed Income and Interest Rates
In part 4 they look at the Credit and Fixed Income markets and whether with higher interest rates bonds are now an attractive proposition. They finish up discussing the importance of currency positioning and how it is not only sterling that has been very weak compared to the dollar but other currencies too.
Part 5 – 60/40 Portfolio Evolution
In the final video the team discuss the ‘death of the 60/40 portfolio’ and how the 60/40 portfolio has changed and will continue to change in the future. They wrap up by discussing how PAM’s MPS portfolios gain extremely efficient market exposure by using very simple instruments to help achieve people’s goals, coupled with a Dynamic Overlay which gives access to those liquid, highly diversified, forward-looking opportunities.
