聚焦靈活配置：如何配置固定收益組合以應對波動市況

兩位固定收益投資專家探討如何聚焦靈活配置固定收益組合以應對波動市況。 (僅提供英文版)

After the inflation shock of 2021 – 2022 triggered a rapid rise in interest rates across most developed markets, cash and bond investors enjoyed a welcome boost in income thanks to the return of attractive yields. 

Amid the recent resumption of market volatility, bonds continue to provide capital appreciation along with still high income. However, the path ahead may require skilful navigation, given stubborn inflation, growing differences in economic growth trajectories across countries and divergence in policymakers’ responses. Shifting geopolitics — exacerbated by the actions of US President Donald Trump since his return to the White House — present another factor of unpredictability, as illustrated by the latest bout of market turmoil. How should investors think about repositioning their portfolios for this prevailing uncertainty?

Adapting to a structurally different macro background

Today’s uncertain outlook reflects a structural regime change that we believe investors need to be attuned to. The key features of this new economic era include:

• a less stable economic environment with more frequent and shorter cycles;
• higher and more volatile inflation;
• increased geopolitical rivalry and divergence as globalisation slows and, in some areas, even reverses; and
• structurally higher government intervention and fiscal spending.

Central banks are no longer acting as a source of stability, as they are caught between the need to contain inflation and the desire to avoid engineering the economic slowdown that may be needed to bring inflation durably back in line with their targets. This dilemma could be exacerbated by the impact of US tariffs as governments may have no other choice than to loosen the purse strings. Monetary policy decisions may well catch investors by surprise, with central banks taking potentially very different paths. For instance, given the major ramifications of US tariffs on the European economy, the European Central Bank (ECB) may end up cutting rates meaningfully below current market consensus. On the other hand, wage and inflation data in the UK may hamper the Bank of England’s efforts to continue its rate-cutting cycle. While a risk, this divergence also constitutes an opportunity for investors to capitalise on.

Going beyond cash or single instruments 

While short-term cash deposit accounts have done well over the past few years, we think they now come with a significant reinvestment risk, given declining rates. Unlike bonds, cash instruments do not benefit from the uptick in bond valuations that typically accompanies rate cuts, and income resets at lower levels, suggesting diversification into fixed income may be overdue. Many investors have already switched part of their cash holdings to domestic government bonds — with several governments now actively targeting retail investors — or other “safe-haven” instruments. However, in our view, further steps could now be warranted. While there is an important role for domestic government bonds in portfolios, complementing single-country exposure with a diversified high-quality global bond portfolio could:

• mitigate reinvestment risk and help shield portfolios from excessive volatility;
• diversify the significant beta risk embedded into a single-country issuer, which may become pronounced in today’s uncertain environment; and
• offer the potential for capturing higher yields that may be available elsewhere.

Adopting a flexible fixed-income approach 

Targeted diversification does not necessarily mean having to take on significant duration or credit risk. In fact, we think that in an uncertain environment, flexibility can be a bond investor’s best friend. Specifically, we think high-quality, unconstrained approaches offer an attractive avenue to complement existing portfolios as they have limited average duration and credit exposure while offering diversification across the full gamut of countries, sectors and themes.

And we think the signs are encouraging for flexible fixed-income strategies to continue their positive trajectory in today’s diverging world, offering both significant scope for downside protection and opportunities for upside potential amid market dislocations. These sudden readjustments are likely to be a constant feature of this new economic era.

• For instance, at this stage, the US administration’s policy programme is likely to lead to structurally higher inflation, heightened volatility and a potential reversal in global capital flows, as well as a slide in the US dollar. Elsewhere, Japan and the UK appear to be pursuing monetary policies that are still in dissonance with the economic data, while the euro area remains hobbled by political constraints in France, concerns about debt sustainability — only partially offset by Germany’s fiscal measures — and the continued impact of the war in Ukraine. Across the board, US tariffs and the risk of a surge in Chinese imports to non-US markets are now key areas of concern for policymakers and investors.

• On the opportunity side, countries like Australia, New Zealand and Canada boast low levels of public debt but high private debt, meaning their central banks may be better equipped to deal with any financial instability and more sensitive to a deterioration in the cycle. They could deliver higher and more stable total returns given high starting points in yields as well as acting as alternative “safe havens”. 

Bottom line

We believe investments in fixed income should seek to achieve three key objectives: 

• reliable and recurring income, with a growth component
• enhanced diversification and liquidity
• capital preservation over the longer term

In today’s more unpredictable environment, we think these objectives can be best achieved by adopting a more flexible approach that targets a global opportunity set within robust risk constraints. In our view, having greater flexibility on duration, country and sector selection can help protect both income and capital during periods of heightened volatility. As such, we think this can be a powerful addition to most portfolios, helping to smooth the impact of volatility on single country or region allocations by diversifying exposures across diverging economic and policy cycles. 

In practice, there are a wide range of unconstrained strategies available in the market and investors will need to ensure that the chosen approach meets their specific requirements. Given the uncertain environment, one avenue investors may wish to pursue is allocating to flexible fixed-income strategies that place a higher emphasis on capital preservation and liquidity through higher allocations to select high-quality government bonds — but still provide the potential for positive long-term returns through exposure to a rich, global opportunity set.