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Read Part I

The investment landscape is shifting as higher-for-longer interest rates and U.S. fiscal manoeuvres reshape global markets. Traditional asset allocations are increasingly ineffective amid monetary tightening, debt restructuring, and potential currency interventions such as zero-coupon swaps or a coordinated devaluation (the “Mar-a-Lago Accord”). 

These actions, instead of easing pressure, may heighten financial instability, triggering liquidity stress, volatility, and tail-risk events. This thesis argues for a new investment paradigm—where resilience is built through strategies that hedge policy-driven risks, maintain capital flexibility, and exploit macro dislocations. 

A Total Portfolio Approach should be considered—one that focuses on active management, alternative credit, private markets, and inflation-protected assets—moving beyond simple diversification to structurally adapt to the new regime.

Macro Thesis: World is Changing – Part 1

Review a Little History

How Today’s Macro Risks Have Played Out Before
 
This deck explores the historical precedents of what has been highlighted in the macro thesis. It’s not as farfetched or unlikely as some would like us to think. In many cases, these events also happened when the consensus view was actually to the contrary.
 
They say history does not repeat itself, but it rhymes, and with economics and politics being upended, what if the protector becomes the aggressor and the safe haven asset is actually the risky asset?
 
In today’s new world it’s worth reflecting on the past to gain some insights into both market and human behaviour so when we stress test our portfolios, we can seek out opportunities that may afford us greater downside protection, while also gaining from any potential upside.  

Macro Thesis: Historical Precedent

Read Part II

Strategic Asset Allocation (SAA), long the default for institutional investors, relies on fixed asset class weightings and periodic rebalancing. While structured and transparent, it may be ill-suited to today’s volatile environment of higher-for-longer rates, event-driven risks, and fiscal manoeuvres like U.S. debt restructuring. 

In contrast, a growing number of sophisticated investors—sovereign wealth funds, super funds, and multi-asset managers—are adopting the Total Portfolio Approach (TPA). TPA moves beyond static allocations, dynamically adjusting based on real-time market dislocations, opportunity costs, and forward-looking risk-adjusted returns. This flexibility is vital in an era of interest rate volatility, policy-driven tail risks, and liquidity challenges. 

While many SAA managers recognise the need to adapt, structural constraints often limit action. TPA enables more responsive capital deployment, aiming to optimise outcomes amid uncertainty.

Macro Thesis: TPA v SAA – Part 2

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