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Our views 06 February 2020

The wonderful world of MAC

By Azhar Hussain, Head of Global Credit, and Khuram Sharih, Senior Fund Manager

5 min read

The extraordinary levels to which interest rates have fallen have overturned decades of conventional market wisdom on asset class performance.

Bonds and equities, having enjoyed a bull run over the last 30 years, now face a far more precarious future. Amid the longest economic cycle in history, investors are increasingly concerned about the risks of a turn in the market and the increasing difficulty in finding attractive places to invest to achieve return and yield objectives.

Against this backdrop, multi-asset credit (MAC) strategies have gained popularity as they provide investors with access to a broader range of tools with which to optimise risk and return through the credit cycle. Diversification can reduce risk compared to a single asset class approach, while dynamic asset allocation combined with bottom-up credit analysis allows investors to position themselves towards the areas of the market with the strongest return prospects.

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