Rethinking Diversification: Bonds, Commodities and Trend in the Current Market Regime

The world appears to have entered a period in which the structural forces that shaped the past 25 years of economic growth – relatively unrestrained globalisation, deep trade integration, abundant energy and the free movement of labour and capital – are being reassessed, as their economic, political and social consequences become increasingly contentious. As tensions surface, geopolitical frictions and direct conflicts have re‑emerged, exposing the fragile link between economic prosperity and geopolitical stability.

Should this re-assessment prove to be a structural macro shift rather than a short-lived adjustment, the consequences for investors’ portfolios will be significant. In this environment, portfolio construction must adapt towards greater resilience and adaptability; properties trend‑following strategies are able to deliver.