Schroders top 10 predictions for 2023: Favors short-duration high-yield bonds, Hong Kong and mainland Chinese equities, clean energy

Over the course of 2022, global asset returns are among the worst on record, and challenges have persisted, according to Schroders in its report of 10 predictions for 2023 across various asset classes, which highlights the importance of a dynamic asset allocation and diversification investment approach in the face of economic headwinds.

Although markets are likely to remain volatile, investors can sit up and take heed of the opportunities that lie ahead.

Keiko Kondo, head of multi-asset investments, Asia at Schroders, said the overall market outlook for 2023 will largely depend on the direction of U.S. Fed monetary policy, which the firm sees pivoting, and whether or not a global recession would become a reality, which the team considers likely. Yet, she believes that recession may not necessarily be bad for all markets since financial markets tend to be forward-looking and are likely to have already priced in much of the negative impact.

Schroders has turned