Facilitator: Don Wild, Wild Ochre Consulting Expert: Alexander Chartres - Ruffer
Headlines:
- The economic environment, is now very different with highs in global debt levels and inflation which is at a 40-year high
- Central banks have been slow to react, and in many cases playing catch up
- Conventional asset classes are being challenged, in what returns they can offer
- Returns on bonds and many equities, are weaker than in the post-Cold War period
- Liquidity and real assets have now become more important
Discussion points:
The key question posed, is ‘has the post-Cold War ‘Golden Age; come to an end?
A 30-year period of low interest rates, inflation and volatility have all led to underpinning strong asset performance.
Wholesale change on the ‘supply side’, moving from a ‘hydro carbon’ world to a ‘metals’ world order will involve a massive Capex. Navigating these changes provides an opportunity for asset managers to chart a course through these changes.
The final big geo-political issue is the fragmentation of the world as a ‘’global world view’ is replaced by trading ‘blocs’ based on values and aligned interests. The challenges in this world are to find the right assets with growth prospect against an acceptable level of risk. But the temptation for many will be to chase growth, with a far greater level of risk.
Key Takeaways:
- Active management is required, to ensure the portfolio is agile in responding to these global changes
- Cash is your friend, and liquidity provides flexibility
- A ‘robust ‘approach is required, in what could be quite turbulent times
- Own real assets, as opposed to over reliance on ‘financial assets
- Ruffer provides a proven track record in diversifying risk, and getting equity like returns with decreased volatility. Hence enhancing a ‘portfolio’ for today’s investment climate, helping preserve capital and with the right liquidity to take advantage of opportunities as they emerge
