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Investment Monthly - May 2022

Geopolitical tensions, China lockdowns, and energy prices are key risk factors for inflation.
01 June 2022
    Download the full reportPDF, 4.36MB

    Key takeaways:

    • Ongoing geopolitical tensions, high inflation, and policy hikes keeps a lid on market performance. Overall, we think a defensive allocation is appropriate, which means a selective approach rather than materially reducing equity exposures
    • We think an overly bearish view is not justified. A significant recession is unlikely this year. Interest rate hikes are well priced and likely to peak below previous high points, limiting the downside. A window of better performance may open up later in the year amid cooling inflation and as China policy easing filters through the economic system
    • We focus on regional and style allocations in equities (e.g. value and quality factors), income strategies in fixed income (e.g. Asia fixed income, some parts of global credit), inflation protection and “real” strategies (e.g. commodities, infrastructure)