Rising concentration risk within global equity markets, where a small number of high-performing stocks dominate returns, is increasing vulnerability to potential market corrections, according to Mercer in a December report.
Paired with the complexities of a new macroeconomic regime — characterized by persistent inflationary pressures, elevated interest rates and shifting geopolitical landscapes — the potential for heightened volatility has grown.
In today’s environment, flexibility and diversification are key. Semi-liquid funds are providing a route into private markets for a broader set of wealth investors, while next-generation infrastructure investments align with long-term secular trends like the energy transition and digitalization. Hedge funds can be used to take advantage of market volatility, while active ETFs — which are revolutionizing active exposures across the wealth landscape — offer tactical liquidity and cost efficiency.
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