REVIEW OF ASSET ALLOCATION TRENDS, ASSET CLASS AND MANAGER PERFORMANCE

Key Points:

  • ¬†Institutional allocation to GFI has been rising in recent times.
  • GFI sectors and asset class has done very well over year and decade on the back of falling rates around the world.
  • In 2019, Emerging markets outperformed Developed market returns. UK, Canada, Italy and Australia amongst the best performers in DM.
  • While yield dispersion across major segments remain high, investors need to avoid sectors with high risk, low returns.
  • Active manager performance has been mixed across most styles, yield based style stands out the most.
  • Dispersion of key portfolio and return drivers is very high amongst global fixed income managers.
  • Investors need to compare managers of similar style to ensure apple to apple comps.
  • Dispersion on performance and risk also very high, reflecting greater dispersion of style and factor biases.

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