Multi-asset investing used to be the investment of choice for those looking expressly for diversification. But this is no longer the case as more and more often – the past six months being a case in point – asset classes rise and fall in line with each other.
Schroders’ Joe Tennant argues that traditional diversification is a myth. It does not actually exist, dissolved in part by QE and extended loose monetary policy that has taken the concept of negative correlation out of the investment mix.
Here he explains why the Schroders’ multi-manager team likes hedge fund strategies that target anomalies; why they are underweight equities and slightly underweight bonds while also overweight cash and still able to generate good returns.
Through all of this, Tennant also describes the contrarian opportunities they managed to get into early to capture the upside.
