The Case for Going Global

Global Market

Global diversification can help smooth overall volatility and offer higher risk-adjusted returns.

Under the post-covid regime of higher interest rates, volatility is set to remain
elevated as new higher equilibriums are discovered. Amid unprecedented
disruptions from quantitative tightening, record high supply, and prominent
geopolitical risks, investors should consider the additional value of
diversification offered by investing in global bonds.

Rate cutting cycles will not be uniform as markets find new higher equilibrium rates.

Fixed income is set to benefit from falling rates as many central banks finish
tightening with both the Fed and ECB on the precipice of embarking on easing
cycles. Yet, unlike what we witnessed with the shock of the pandemic, the path
to cutting will not be quite as synchronized and we will see larger differentiation
globally as policymakers recalibrate to the new regime of higher interest rates.

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