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Other - JULY 22, 2022

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Diversification is key for institutional investors managing inflation, recession risks

by Andrea Zander

More than 350 asset managers and asset owners from around the world say they’re uncertain where the global economy is heading, according to a live poll conducted last month at Mercer’s Global Investment Forum (GIF) US. The three most likely scenarios identified were: 1, a potential period of economy-wide overheating (26 percent); 2, stagflation (24 percent); and 3, a hard landing (22 percent).

Greater than half of attendees (58 percent) also said they believed that their equity portfolio structure should be meaningfully different from the market-cap weights now, and more than 75 percent said their portfolios are now on a carbon-transition path.

Diversification will play a critical role as the economy and markets continue to respond to headwinds, including those driven by the Russia-Ukraine conflict and China’s zero-COVID policy, as well as globally tight labor markets and other supply-demand imbalances amid ongoing reopening from the global pandemic, according to

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