Highlights: A good portfolio strategy should not only incorporate the traditional textbook wisdom, but should also adapt to how investors, markets and the world around us are changing. For example, how should longevity and our global lifestyles impact how we invest? Should I widen my asset allocation framework as alternative assets become more accessible? And should elevated global debt levels impact my strategy? A well-designed strategic asset allocation framework remains the best way to tap into new opportunities and stay disciplined and also flexible enough to adapt to investors’ varying objectives.

• Investors’ changing lives and priorities
  As investors live longer and retirements extend, investment pots need to be sufficient to fund that retirement. The number one action is to start saving early in life to benefit from the power of compounding. It is obvious that a narrow focus on blue chip stocks or government bonds will not provide enough growth, or enough income. Accessing growth opportunities in private markets, and income through emerging market bonds or infrastructure can help improve reaching the objectives
• Changing markets
  It is not just investors who become more global; companies are becoming more global as well. It’s one of the reasons why thematic investing remains popular, because capturing the long-term trends that matter may add more to portfolio performance than having small overweights or underweights in particular sectors or geographies. The other big change in recent years is the easier access to alternative assets, as more products and strategies have become available. Of course, investors still need to assess their comfort, knowledge and liquidity needs when looking at alternatives
• A changing world
  The expansion of private markets coincides with two key macro-economic observations: the huge need for capital and many governments’ high debt levels. The world needs to make a green transition, requiring huge investments in clean energy generation, the build-out of a more versatile electricity grid and investment in R&D. At the same time, the demand for electricity is rising quickly because of AI, which also needs the build-out of big data centres. And on top of all of this, many countries, including the US, are re-onshoring manufacturing and spending more on defence
• Global diversification
  We continue to be firm believers in global diversification, and the use of public and private markets, wherever appropriate. A global strategic asset allocation, tweaked for investors’ specific needs and preferences, is the best way to stay disciplined, tap into the rich opportunity set and achieve our client’s long-term goals