Asset Allocator

Are you more exposed to AI stocks than you realise? As the AI trade comes under pressure and bond markets experience renewed volatility, investors could be taking on risks they never intended.

Eleanor Ingilby, head of high net worth and senior portfolio manager at Atomos, joins Asset Allocator to explain why global ETFs can leave investors heavily exposed to artificial intelligence and the Magnificent Seven, and how to build a more diversified investment portfolio.

Speaking to David Thorpe and Tara O'Connor, Ingilby explores the opportunities emerging from rising government bond yields, the role of alternative investments and why catastrophe bonds are attracting attention as a source of income and portfolio diversification. From fixed income and alternative assets to AI valuations and long-term investment strategy, this episode examines how wealth managers and financial advisers can navigate today's market uncertainty.

00:00 - Market volatility and investment opportunities
02:37 - Why portfolio diversification matters
05:04 - Catastrophe bonds: An alternative source of income\
06:47 - AI stocks, the Magnificent Seven and diversification
08:40 - Building defensive portfolios in volatile markets

The Asset Allocator Podcast discusses the big issues in UK fund selection and how wealth managers are positioning their portfolios. Sign up to the newsletter.
Hosted on Acast. See acast.com/privacy for more information.

With bond yields rising, inflation remaining stubborn and US stock markets increasingly dominated by a handful of technology giants, are investors rethinking how they build portfolios?

Eric Louw, senior investment manager at Aberdeen, joins Asset Allocator to explain why the firm has been reducing exposure to riskier assets, increasing allocations to government and investment-grade corporate bonds, and finding new opportunities in infrastructure and global equities.

Speaking to Aamina Zafar and David Thorpe, Louw discusses whether higher bond yields are here to stay, why shorter-duration bonds currently appeal to Aberdeen, and how infrastructure investments can provide diversification and protection against inflation.

The conversation also explores the risks of relying too heavily on the Magnificent Seven and the AI investment boom, alongside opportunities in UK and European small-cap stocks, Japanese equities and emerging markets.

Louw also shares the investment lessons of the past five years and explains why disciplined portfolio construction could be more valuable than attempting to predict the next market shock.

Timestamps
00:00 - Introduction: Aberdeen's asset allocation strategy
02:17 - How infrastructure performs when bond yields rise
06:13 - Short-term vs long-term bonds: Managing duration risk
08:43 - Looking beyond US equities and the Magnificent Seven
10:08 - Opportunities in Asia and emerging markets
13:25 - Why genuine portfolio diversification matters

The Asset Allocator Podcast discusses the big issues in UK fund selection and how wealth managers are positioning their portfolios. Sign up to the newsletter.
Hosted on Acast. See acast.com/privacy for more information.

Commodities should serve as a reliable safe haven in the event of an equity downturn next year according to Trevor Greetham, head of multi-asset at Royal London Asset Management, who shared his prediction when he joined this week’s Asset Allocator podcast.

Joining Aamina Zafar and David Thorpe, Greetham draws parallels between today's economic environment and the stagflation of the 1970s, explaining why geopolitical tensions, energy prices and commodity shortages could make inflation a persistent challenge for investors.

He also questions whether the surge in US corporate earnings, fuelled partly by artificial intelligence investment, data centres and semiconductor spending, is sustainable. With US equity valuations elevated, Greetham makes the case for overlooked opportunities in UK and European stocks, describing the UK stock market as a potentially attractive, inflation-resilient investment.

The conversation also explores the changing outlook for government bonds, UK gilt yields and inflation-linked gilts, alongside the role of commodities and gold in protecting multi-asset portfolios.

Timestamps:
00:00 - Trevor Greetham on investing and inflation
03:09 - Central banks, interest rates and inflation hedges
04:27 - Where is the value in global equities?
06:29 - UK stocks, commodities and inflation resilience
09:45 - The risks of US stock market concentration
14:04 - How to invest in commodities using ETFs and indices

The Asset Allocator Podcast discusses the big issues in UK fund selection and how wealth managers are positioning their portfolios. Sign up to the newsletter.
Hosted on Acast. See acast.com/privacy for more information.

Government bond yields are approaching five per cent, raising a crucial question for investors: could higher interest rates threaten global stock markets, or are bonds becoming a more attractive investment than equities?

In this episode of the Asset Allocator podcast, Simoney Kyriakou is joined by Joe Little, global chief strategist at HSBC Asset Management, to discuss the outlook for bond markets, interest rates, inflation and global equities as investors adjust to a higher-for-longer interest rate environment.

With US Treasury yields and UK gilt yields rising, Little examines what's driving the global bond sell-off, why inflation-adjusted yields matter and whether government bonds now offer a compelling alternative to stock market investing.

The conversation explores the risks higher bond yields pose to equity valuations, why strong corporate earnings continue to support US and European stocks, and what a sustained rise in borrowing costs could mean for investment portfolios.

They also discuss the resilience of the US dollar amid geopolitical uncertainty, the implications for emerging markets including China, India and Brazil, and whether the Federal Reserve, Bank of England and European Central Bank have enough room to respond to inflation without damaging economic growth.

Little also explains why central banks may deliver fewer interest rate rises than markets currently expect and how that could create opportunities for bond and equity investors.

Click here for more investment insights from HSBC Asset Management: Investment Insights | HSBC Asset Management

Timestamps:
00:00 - Why bond yields are rising
05:47 - Can higher bond yields hurt stock markets?
08:54 - Why the US dollar remains strong
13:03 - Are central banks running out of options?
16:17 - Have markets priced in too many rate hikes?

The Asset Allocator Podcast discusses the big issues in UK fund selection and how wealth managers are positioning their portfolios. Sign up to the newsletter.
Hosted on Acast. See acast.com/privacy for more information.

How should investors build a diversified portfolio when bond yields are rising, inflation remains a risk and the AI boom is reshaping global equity markets?

In this episode of the Asset Allocator podcast, Aamina Zafar and David Thorpe are joined by Darius McDermott, managing director of Chelsea Financial Services, to discuss how investors can position portfolios for today's market environment.

McDermott explains why higher bond yields can affect equities as well as fixed income, and why traditional geographic diversification may no longer work quite as expected as AI-related stocks become increasingly important across the US, Asia and emerging markets.

The conversation explores how investors can diversify beyond the dominant AI theme, including opportunities in UK equities, infrastructure, energy, water and waste, global insurance, private equity and defence.

They also discuss what a more defensive portfolio could look like, from short-duration bonds and gilts to cash, gold and lower-beta equities, and why understanding correlations between different assets becomes particularly important during periods of market stress.

Plus, McDermott explains why Chelsea Financial Services reduced its exposure to longer-duration gilts and US Treasuries and why higher yields could now make parts of the gilt market increasingly attractive again.

00:00 - How higher bond yields affect equities
04:01 - How to diversify beyond the AI trade
05:53 - How to build a defensive portfolio
08:43 - Can alternatives replace bonds and equities?
12:51 - How Chelsea Financial Services changed their play

The Asset Allocator Podcast discusses the big issues in UK fund selection and how wealth managers are positioning their portfolios. Sign up to the newsletter.
Hosted on Acast. See acast.com/privacy for more information.