INVESTMENTS & PENSIONS
GRAPH SHOWING RETURN OF SHORT-DATED VS LONG-DATED UK GILTS 105
100
Total Return ( GBP ) %
95
90
85
80
Bloomberg Global Aggregate Government Index TR £ Hedged MSCI AC World NTR £
Source : Bloomberg . period shown from 31 / 12 / 2021 to 31 / 12 / 2022 TR denotes total return GBP denotes pound sterling data to 31 / 12 / 2022 Past performance is not an indicator of future returns .
These active allocation decisions within the equity and bond component of the portfolios helped contribute to superior performance on the downside during 2022 when equity and bond correlations turned positive , and both offered a negative return .
Whilst 2023 saw both equities and bonds provide a positive return ( particularly in Q4 when hopes were raised that interest rates would soon be cut ), the question going forward is whether this can continue , or will the risk of equities and bonds falling together reappear in 2024 ? Given the uncertainties that remain concerning the path of inflation and whether central banks will be able to lower interest rates , the Risk Controlled MPS maintains its barbell strategy within equities and its preference for shorter-dated bond funds within fixed income . Whatever 2024 brings , it remains certain that managers of multi-asset strategies will need to actively manage their portfolio interest rate risk to provide a competitive return for their clients .
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All data provided by Brooks Macdonald and as at 31 December 2022 unless otherwise stated . The information in this document does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it . Tax treatment depends on individual circumstances and may be subject to change in the future . Brooks Macdonald does not provide tax advice and independent professional advice should be sought . This document is for the information of the recipient only and should not be reproduced , copied or made available to others . This document is intended for professional advisers only and should not be relied upon by any persons who do not have professional experience in matters relating to investments . Brooks Macdonald Asset Management Limited is regulated by the Financial Conduct Authority . Registered in England No 03417519 . Registered office : 21 Lombard Street , London , EC3V 9AH . Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies . Brooks Macdonald Group plc is registered in England No : 04402058 . Registered office : 21 Lombard Street , London , EC3V 9AH . Brooks Macdonald International is a trading name of Brooks Macdonald Asset Management ( International ) Limited . Brooks Macdonald Asset Management ( International ) Limited is licensed and regulated by the Jersey Financial Services Commission . Its Guernsey branch is licensed and regulated by the Guernsey Financial Services Commission and its Isle of Man branch is licensed and regulated by the Isle of Man Financial Services Authority . In respect of services provided in the Republic of South Africa , Brooks Macdonald Asset Management ( International ) Limited is an authorised Financial Services Provider regulated by the South African Financial Sector Conduct Authority . Registered in Jersey No : 143275 . Registered office : Third Floor , No 1 Grenville Street , St Helier , Jersey , JE2 4UF More information about the Brooks Macdonald Group can be found at brooksmacdonald . com
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