Thomas De fauw

Trend-following strategies, also known as managed futures, have historically performed well during periods of strong market movements.

Allianz GI and JP Morgan AM take different paths to multi-asset income: one prioritises yield, the other favours balance. Morningstar compares their approach.

Morningstar’s flexible allocation category includes a diverse group of funds with largely unconstrained mandates. These strategies typically have significant leeway to adjust weightings between equities and bonds and to incorporate alternative asset classes into the mix. Private markets have recently garnered more attention, and the rally in gold hasn’t gone unnoticed by investors either.

Beyond the human suffering, the COVID-19 pandemic had far-reaching consequences for numerous sectors, particularly the real estate sector. Some market segments are still searching for a new equilibrium. Unlike the 2007-2008 crisis, attention this time has been less focused on the housing market and more on commercial real estate.

Allocation funds have fallen out of favour with investors since their weak performance in 2022, and in 2023, the classic equity-bond mix portfolio was even declared dead in some quarters. This proved premature, as these portfolios have performed well in recent years.

Bitcoin recently hits the symbolic 100,000 dollar mark as spot ETFs surge in popularity among investors.

Donald Trump’s comeback in American politics is a reality. With a strong mandate from voters and a Republican-controlled Congress, he now has more leeway than in his previous term. Bond investors have reacted cautiously to last week’s election outcome.

Flexible allocation funds typically have broad latitude to adjust their asset allocation. Additionally, their managers have the freedom to add alternative asset classes to the mix, with gold being a well-known option.

Spreads on high-yield bonds are tight, and the fundamentals of high-yield look strong. Taking (credit) risks has clearly paid off this year.

Local currency bonds have lagged this year, but expected interest rate cuts by the Fed have investors in emerging markets hoping for better times.