The worst drawdowns typically happen in recessions. However, investors have experienced even worse drawdowns in this bull market than previous ones. We believe a changing market structure could be the culprit.
For investors, the benefit of investing in a defensive fund during a recessionary period should be clear, as the aim to reduce drawdowns in significantly falling markets makes it easier to regain capital in the future.
However, with market structure changes leading to the increased frequency and magnitude of bull market drawdowns and flash crashes, a defensive strategy has an important role in an investor's portfolio throughout the cycle, particularly for those investors with nearer-term liabilities and needs.
We believe this is why defence always makes sense.
Past performance is not a reliable indicator of future results, losses may be made. The amount of income may rise or fall. The Fund may invest more than 35% of its assets in securities issued or guaranteed by a permitted sovereign entity, as defined in the definitions section of the Fund's prospectus.