Diversified high-return assets hold the key to managing risk/reward

Equity markets around the world have continued to rally, fuelled by liquidity and some signs of improving economic data.

Yet despite the surge in share prices, we are not anticipating a rapid, V-shaped recovery. Deleveraging by consumers, companies and governments looks set to continue, potentially resulting in slower demand and sub-trend economic growth for a protracted period. In both the developed and developing worlds, governments are playing a far larger role in determining economic activity – resorting to “printing money” to stabilise the economy. “Real” assets such as equities, commodities and property will benefit from these loose financial conditions. The long-term investment case for commodities ...