Sheldon MacDonald talks to FTAdviser about diversification and market opportunities

Sheldon MacDonald, Marlborough’s Chief Investment Officer – Multi-Asset, has talked to FTAdviser about how financial advisers and their clients can use multi-asset portfolios to navigate today’s economic uncertainty and market volatility.

In the Q&A, Sheldon emphasises the importance of maintaining a long-term perspective and avoiding knee-jerk reactions, despite sharp market falls. He explains how multi-asset managers can use tactical tilts based on shorter-term market dynamics to add value for portfolios.

He underlines the value of diversification, which was described by Nobel Prize-winning economist Harry Markowitz as ‘the only free lunch in investing’. Sheldon says that looking ahead he and the team are expecting to see opportunities across a range of asset classes. However, they are also expecting volatility – and diversification will be key to smoothing the journey for investors.

Sheldon tells FTAdviser that he and the team are watching closely for the right time to start a tactical shift from short duration bonds to longer duration bonds. Short duration bonds tend to be less sensitive to price falls caused by rising inflation, but long duration bonds tend to perform better in a recession.

In the equity component of portfolios, Sheldon and the team have been increasing exposure to equity income funds. They expect well-managed companies that are able to pay stable dividends, even in challenging conditions, to see their share prices appreciate.

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31/10/2022

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