Embracing market volatility

Investment themes 2023

THEME 3

Volatility creates opportunity

The year 2022 will rank as one of the highest years in decades for volatility in global bond and foreign exchange (FX) markets given the uncertainty around interest rates and the question of when inflation will peak. The era of zero rates and the global central bank “put” are now history. Global central banks are pursing different paths for controlling inflation. In addition, global equities entered a bear market and are experiencing higher volatility amidst mounting fears about the extent of a recession.

This environment is creating enhanced opportunities to utilise structured solutions across asset classes in bonds, FX, equities and commodities. In addition, it provides unique opportunities in global macro and trend-following strategies, gold, as well as higher quality companies with secure and growing dividends.