Prepping portfolios for next market storm? Not just gold and government bonds

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LONDON: G7 government bonds? Check. Gold? Check. But that may not be enough as the coronavirus crisis accelerates a hunt for a wider pool of ...

LONDON: G7 government bonds? Check. Gold? Check. But that may not be enough as the coronavirus crisis accelerates a hunt for a wider pool of assets to better balance investment portfolios during stressful times.

Compare that to Bunds' 10 per cent price rally during the worst of the 2011 euro debt crisis between end-May and early-August."We do have a sense that things are shifting," said Wouter Sturkenboom, who helps to formulate investment strategy for US$350 billion in client assets at Northern Trust Asset Management.

The traditional multi-asset strategy - an equity-dominated portfolio alongside a big dollop of government bonds - appeared to function less well this year than during past crises. In Europe too, US$2.4 trillion of top-rated credit is eligible for European Central Bank purchases - on top of US$8 trillion in government debt.

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