Investment Conundrums: Pacific AM's Bartleet on why his single largest concern is complacency in markets

'Hostile' 2018

Will Bartleet, CIO of Pacific Asset Management, has said it is crucial to diversify away from equities and bonds in this quantitative tightening cycle, as the resulting lack of liquidity was likely to lead to a repricing of both asset classes.

Bartleet said he was preparing his portfolios for a more hostile environment this year compared to the ‘Goldilocks' characteristics seen last year.  He also warned a sharp pick-up in inflation was the biggest short-term risk to markets, while over the long term he is concerned about navigating his portfolios through the normalisation of monetary policy. In October 2017, the Federal Reserve began scaling back its $4.5trn balance sheet, while new Fed Chair Jerome Powell earlier this month signalled four potential rate hikes this year. "Rising interest rates in the US and the withdraw...