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Investment Monthly – October 2022

Amid sticky inflation, central banks are continuing to maintain a hawkish stance with higher peak interest rates anticipated compared to last month.
03 October 2022
    Download the full reportPDF, 4.83MB

    Key takeaways:

    • We continue to advocate a defensive allocation. High inflation, recession, and rapid policy hikes raises the risk of financial stress and heightened market volatility. A profits slowdown is the next big risk to navigate
    • But it is critical to focus on how much bad news is already discounted. Wider spreads and higher risk premiums can offer up income opportunities. At this point in the cycle, high quality bonds become the natural asset allocation choice given higher yields and the risk of recession
    • Asia faces a number of macro challenges. The economic and policy mix differs from the West and Asia assets can offer uncorrelated returns
    • Fixed income alternatives such as private credit or hedge funds, or more defensive growth asset classes such as natural capital, real estate or infrastructure can also prove attractive. Being active remains key