With investors skittish about deflation and inflation, Barclays Wealth is recommending a portfolio that is overweight in risk assets such as equities and high-yield credit, as well as long dated bonds, while remaining underweight in cash and investment-grade credit.
For this “barbell” approach to work, both stocks and bonds have to face relatively limited downside, according to Kevin Gardiner, head of global investment strategy for Barclays. “If this weren’t the case, what we gained at one end might be given back at the other,” he said in a statement. He added that the “reduced likelihood of a hike in official interest rates on both sides of the Atlantic offers a degree of support to bond prices,” which means that a major sell-off appears to be unlikely with such a steep curve.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access