Portfolios Shift To Bonds


    Investment professionals shifted client portfolios away from stocks in favour of bonds and alternative assets in the first quarter to limit the impact of increasing market volatility, says data from Natixis Global Asset Management. The moves exemplify an emerging trend where the financial markets seem to be increasingly rewarding diversified portfolios. In the first quarter, the average portfolio in the study had 50 per cent of assets in stocks, down from 53 per cent a year earlier. Investors held 29 per cent in bonds (up from 28 per cent) and raised allocations to alternative strategies to 7.7 per cent (from six per cent). Of the remainder, 7.6 per cent was held in allocation funds and 5.4 per cent in real estate investment trusts (REITs), commodities, and cash. The use of low- and minimum-volatility funds tripled since the beginning of 2015, making their way into nearly 18 per cent of advisors’ portfolios. “The return of volatility to the markets has been a not-so-subtle reminder of the importance of diversification and risk management,” says John Hailer, CEO of Natixis Global Asset Management for the Americas and Asia. “Markets can be unpredictable, so it is important to build durable portfolios that can weather the storm and keep you on track to meet your financial goals.”