Cross Asset Investment Strategy - February 2021

Wednesday 10 February 2021

Cross Asset

Markets are questioning the no inflation forever narrative as breakeven inflation expectations rose in the US, amid an accelerating economy and hopes of additional fiscal stimulus. This warrants a cautious and active stance on duration so that investors closely watch movements of yields and consider exposure to inflation-linked bonds. On equities, cyclical, value and quality stocks offer an attractive way to play the improving economic environment, but being selective and valuation-conscious is key. Overall, investors should remain agile and flexible in their allocation, and consider less correlated investment strategies to enhance diversification.

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