Equities and fixed income will continue to play a critical role in investment portfolios, says research by Russell Investments Canada. ‘The Move to Multi-Asset’ says, however, because of continued political and economic ambiguity, going forward investors will be forced to actively manage the risk in their portfolios if they wish to achieve their investment objectives. “There are macro forces at play that were not on the radar five years ago,” says Shailesh Kshatriya, associate director, client investment strategies, Russell Investments Canada. “While recent experience has been kind to conservative investors, no trend is indefinite and investors will need to look beyond global uncertainties and rethink their approach to asset allocation in favour of more broadly diversified, multi-asset solutions.” Specifically, the research suggests that broader diversification comes in three ways ‒ improving the global macro focus by adding exposure to global and emerging markets equities; fixed income exposure should become considerably more global with the inclusion of emerging markets debt and global high yield bonds; and ‘real assets’ ‒ global infrastructure, global real estate, and commodities ‒ should be used to provide additional sources.
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