Top considerations for financial intermediaries in 2023 

Now, investors must face the linked challenges of high inflation, rising yields and market volatility. To put this in perspective, inflation across all 38 members of the OECD between 2010 and 2020 (before the pandemic) ranged between 0% and 3%¹. Now it is running at over 10%. This, combined with synchronized interest rate hikes (put in place by major central banks in response to inflation), risks triggering a global recession. Ironically, whether this economic contraction is mild or deep depends, at least in part, on the unpredictable path of inflation and further central bank responses.

In this report, we discuss regional monetary policy dispersion and look at how advisers and their clients can ensure portfolios are diversified both across and within asset classes, as well as by geography, sectors, factors, investment styles and non-traditional market betas. This diversification is vital as it will allow preparations to be made for a period of higher-for-longer interest rates, and an uncertain growth outlook.