Bond resurgence sparks rethink of alternatives in multi-asset portfolios

New environment raises bar to invest

The resurgence of fixed income in recent months has sparked a rethink of the role alternative investments play in a multi-asset portfolio, but opportunities may remain for selective investors.

Alternative investments have grown in popularity in recent years. Since 2015, assets under management across all alternative asset classes has grown from $7.2trn to $13.3trn by the end of 2021, according to Preqin.  This growth has come as investors began questioning the role of fixed income in multi-asset portfolios, as a decade of low interest rates meant bonds offered scarce income and limited diversification in the event of an economic downturn. A feature of monetary policy during this period was to get money out of the safety of bonds and into riskier assets or the real economy. ...