Asset allocation involves constructing a portfolio using different sources of return. These include traditional assets, such as equities, bonds and cash, as well as alternatives, including commodities, real estate and private equity. The theory is that we can drive performance and reduce risk because each asset class has a different correlation to the others – for example, when equities rise, government bonds often fall. 

Invest in a richer life,
however you define it.

This document has been prepared by Quintet Private Bank (Europe) S.A. The statements and views expressed in this document based upon information from sources believed to be reliable – are those of Quintet Private Bank (Europe) S.A. as of 20 June, 2020 and are subject to change. This information is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information. This document is of a general nature and does not constitute legal, accounting, tax or investment advice. This document does not provide any individual investment advice and an investment decision must not be based merely on the information and data contained in the document. All investors should keep in mind that past performance is no indication of future performance, and that the value of investments may go up or down. Changes in exchange rates may also cause the value of underlying investments to go up or down.

Copyright © Quintet Private Bank (Europe) S.A. 2020. All rights reserved. Privacy Statement


During the first few months of 2020, our positions were performing well but some suffered when markets reacted swiftly to fears of a looming recession as the world went into lockdown. Notably, our overweight allocation to equities suffered initially when stock markets fell. However, we believed governments and central banks would support the economy and held onto these positions, which then recovered.

The outlook for the rest of the year and beyond remains uncertain, and we’ve evolved our asset allocation views to reflect this situation. We’re maintaining a risk-on stance in portfolios, supported by our expectation of a rebound in global growth, combined with sizeable and effective monetary and fiscal stimulus

We’re not afraid of making difficult calls. Within our small overweight in equities, we see the potential in US markets (and technology and healthcare companies in particular) and emerging markets. Within fixed income we overweight European high yield debt and emerging market sovereign bonds. We also have an overweight allocation to assets that provide sources of diversification, including gold, US Treasury bonds and the Japanese yen.

Our asset allocation dashboard shows you how you could trade off the risks and opportunities represented by the different asset classes and sub-asset classes

Asset allocation

When building investment portfolios, it’s important to set a strategic asset allocation that matches long-term individual financial objectives, including target returns, appetite for risk and time horizons. We then adapt the mix of investments to reflect the evolving investment environment by making tactical decisions to avoid risks and capture opportunities we identify.

To make sure we apply our views consistently, we maintain an asset allocation dashboard, which shows how we can overweight or underweight different markets and regions. This framework goes into even greater detail within each asset class. For instance, although we might recommend a lower allocation to fixed income, we might like certain areas, such as inflation-linked bonds.

Moving with the times

Allocation dashboard

Click on an asset class to reveal the constituent sub-asset classes

EQUITIES
FIXED INCOME
ALTERNATIVES
FX
CASH
4.0
3.0
-7.0
0.0
0.0
N

Allocation Dashboard

Asset allocation

Our asset allocation dashboard show you the optimal way to trade off the risks and opportunities represented by the different asset classes and sub asset classes 

Asset allocation involves constructing a portfolio using different sources of return. These include traditional assets, such as equities, bonds and cash, as well as alternatives, including commodities, real estate and private equity. The theory is that we can drive performance and reduce risk because each asset class has a different correlation to the others – for example, when equities rise, government bonds often fall. 

When building investment portfolios, it’s important to set a strategic asset allocation that matches long-term individual financial objectives, including target returns, appetite for risk and time horizons. We then adapt the mix of investments to reflect the evolving investment environment by making tactical decisions to avoid risks and capture opportunities we identify.

To make sure we apply our views consistently, we maintain an asset allocation dashboard, which shows how we can overweight or underweight different markets and regions. This framework goes into even greater detail within each asset class. For instance, although we might recommend a lower allocation to fixed income, we might like certain areas, such as inflation-linked bonds.

Moving with the times

During the first few months of 2020, our positions were performing well but some suffered when markets reacted swiftly to fears of a looming recession as the world went into lockdown. Notably, our overweight allocation to equities suffered initially when stock markets fell. However, we believed governments and central banks would support the economy and held onto these positions, which then recovered.

The outlook for the rest of the year and beyond remains uncertain, and we’ve evolved our asset allocation views to reflect this situation. We’re maintaining a risk-on stance in portfolios, supported by our expectation of a rebound in global growth, combined with sizeable and effective monetary and fiscal stimulus

We’re not afraid of making difficult calls. Within our small overweight in equities, we see the potential in US markets (and technology and healthcare companies in particular) and emerging markets. Within fixed income we overweight European high yield debt and emerging market sovereign bonds. We also have an overweight allocation to assets that provide sources of diversification, including gold, US Treasury bonds and the Japanese yen.

Invest in a richer life,
however you define it.

This document has been prepared by Quintet Private Bank (Europe) S.A. The statements and views expressed in this document based upon information from sources believed to be reliable – are those of Quintet Private Bank (Europe) S.A. as of 20 June, 2020 and are subject to change. This information is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information. This document is of a general nature and does not constitute legal, accounting, tax or investment advice. This document does not provide any individual investment advice and an investment decision must not be based merely on the information and data contained in the document. All investors should keep in mind that past performance is no indication of future performance, and that the value of investments may go up or down. Changes in exchange rates may also cause the value of underlying investments to go up or down.

Copyright © Quintet Private Bank (Europe) S.A. 2020. All rights reserved. Privacy Statement


Contact us

For further information, please visit: www.quintet.com

Please enter your name
Please enter a correct e-mail address
Please enter a comment
Thank you! Your message has been sent.
Something went wrong while submitting the form. Try again.

Share this page

Forward this page by e-mail or share it directly on social media.

Search

Search for an article within this publication.
Minimal length to search is 3 characters

Download PDF

This publication is available in PDF format. Click the button below to start the download, this can take several seconds. Note that interactive components like videos & slideshows are missing in the print version.
Download single article PDF
Download complete PDF

Seeing the world differently

Counterpoint July 2020 is our first digital monthly edition of Counterpoint. Each month we will add a new edition to this library to keep you up to date on our macroeconomic and market views.
Fullscreen

Seeing the world differently

Counterpoint July 2020 is our first digital monthly edition of Counterpoint. Each month we will add a new edition to this library to keep you up to date on our macroeconomic and market views.

This website uses cookies

We use functional and analytical cookies to improve our website. In addition, third parties place tracking cookies to display personalised advertisements on social media. By clicking accept you consent to the placement of these cookies.