Applying the “three lines of defense” in multi-asset income
Facing volatile markets and lower rates, how can investors seek yield while managing risk?
Multi-asset funds invest in stocks and bonds in attempt to manage risk while providing possible capital appreciation and income. In an uncertain market, a conservative multi-asset portfolio1 will likely help investors ride through market cycles as they are historically less volatile than a pure stock portfolio.
Amid heightened market volatility and uncertainties around interest rates, investors, as they consider a more defensive portfolio, may want to place greater emphasis on agility in responding to trends in economic data, but not to market noise. The flexibility to use different asset classes to navigate complex market environments will be a key benefit of multi-asset investing in 2019.
Overall, the principles of staying invested and maintaining a diversified portfolio to achieve your financial objectives still holds true in different phases of the cycle.