Category

Strategies

Summary

This Critical Issues Forum from PortfolioConstruction Conference 2009 argued that the post Global Financial Crisis reality requires that we approach asset allocation with a clean sheet of paper.
*  Are we trying to achieve performance or preservation of capital? In the new reality, preservation of capital will probably provide performance but not vice versa.
*  In the old reality, volatility was low, capital readily available, and inflation suppressed - we focused on certain risks but not others. In the new reality, we have to contend with new (actually very old) risks.
*  In the old reality, the yield curve was flat so you needed structured products, black boxes, hedge funds, and leverage. But in the new reality, we're faced with a steepening yield curve, you want to deleverage, de-equity - plain vanilla is good.
*  Finally, in the old reality, country risk disappeared. But in the new reality, the path to riches is through understanding country and sector opportunities.

Presenter

Hon. Dr Pippa Malmgren

Partner
Canonbury Group (UK)

Ironbark Asset Management