investment viewpoints

Four multi-asset perspectives on inflation

Four multi-asset perspectives on inflation
Aurèle Storno - Chief Investment Officer, Multi Asset

Aurèle Storno

Chief Investment Officer, Multi Asset

Inflation’s return is the talk of the market. How will it impact multi-asset portfolios, and how should investors respond? In the latest quarterly edition of Simply put, we explore they key topic of 2022’s opening through four perspectives:

  • Portfolio allocations: time for a change? How should inflation influence multi-asset investors’ expectations for 2022? We assess long-term historical data showing risks and return in high- and low-yielding regimes to challenge our assumptions and strategic portfolio positioning.
  • Whatever you do, hedge. With risk appetite declining recently, and volatility easing in equities but rising in bonds, one certainty is that inflation hedges served investors well as 2021 drew to a close. They are likely to be key in 2022.
  • How high will inflation go? Given that price increases are already fuelled by last year’s drivers – real wage growth, higher energy prices and a stronger US dollar – we expect inflation to remain elevated but not surge significantly in 2022.
  • Rethink your defence. A number of portfolio construction methods can improve the resilience of portfolios, from diversifying among risk premia to applying momentum and drawdown management strategies. How can they be combined to help investors withstand sustained inflation?

We also provide a summary of our investment research – a hallmark of our investment practice, as we often integrate findings into our management of portfolios. Lately, we have focused on mitigating slippage in trade execution and advancements in the field of machine learning and investment.

To read the Q1 2022 issue of the quarterly edition of Simply put, please click on the download button provided.

important information.

For professional investor use only

This document is issued by Lombard Odier Asset Management (Europe) Limited, authorised and regulated by the Financial Conduct Authority (the “FCA”), and entered on the FCA register with registration number 515393.
Lombard Odier Investment Managers (“LOIM”) is a trade name.
This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.
Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.
No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Asset Management (Europe) Limited prior consent. In the United Kingdom, this material is a marketing material and has been approved by Lombard Odier Asset Management (Europe) Limited  which is authorized and regulated by the FCA. ©2022 Lombard Odier IM. All rights reserved.