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Thursday 17 October 2019
ESG, News, Global Investment View, Investment Talks
A flexible approach is key to deal with a more uncertain world: The increased influence of politics in economic matters and elevated geo (political) risks made it particularly necessary this year to embrace an agile asset allocation approach to benefit from the opportunities that phases of volatility can offer to investors. After starting the year with a cautious stance, we became more constructive on risk assets in January. We then scaled back risk in May amid an increase in uncertainty on the trade front. We are now entering a phase of economic slowdown at a time of very supportive central bank policies that suggests an approach of tactically seeking opportunities in some risk assets while maintaining a strong focus on hedging against possible deterioration of the overall outlook.
Moving towards 2020, volatility, agility and liquidity are the keywords for multi-asset investors: Accommodative central banks, economic slowdown and geopolitical hotspots will continue to move the market, offering opportunities.
Policymakers continue to implement comprehensive strategies to fostering sustainable finance. Most notably, in March 2018, the European Commission adopted its action plan resting on three pillars: (i) re-orienting capital flows towards sustainable investments; (ii) managing financial risks stemming from climate change; and (iii) fostering transparency and long-termism in financial activities.
The Democratic Party has announced the opening of an impeachment inquiry against President Donald Trump following revelations that he pushed Ukrainian President Volodymyr Zelenskiy to investigate the son of Democratic opponent Joe Biden. The impeachment process is long and articulated.
Over the past years, the global investor community continued to integrate risks related to climate change into investment decision making. Such a level of mobilization has yet to materialize for the consideration of social risk.