- Robust asset allocation approach beyond domestic bonds and traditional equities needed to actively manage portfolio risk
- Investors are encouraged to increase "growth exposure" rather than "risk exposure"
- Investors who rely on past experiences may minimize their portfolio's ability to achieve its full potential
TORONTO, April 18, 2013 /CNW/ - The latest research published by Russell Investments Canada entitled "The Move to Multi-Asset" acknowledges that equities and fixed income will continue to play a critical role in investment portfolios. However, because of continued political and economic ambiguity, going forward investors will be forced to actively manage the risk in their portfolios if they wish to achieve their investment objectives.
"There are macro forces at play that were not on the radar five years ago," according to Shailesh Kshatriya, Associate Director, Client Investment Strategies, Russell Investments Canada. "While recent experience has been kind to conservative investors, no trend is indefinite and investors will need to look beyond global uncertainties and rethink their approach to asset allocation in favour of more broadly diversified, multi-asset solutions."
Russell's latest research discusses how and why the old approach to investing needs to be revisited, and argues that intelligently diversified multi-asset solutions, which go beyond traditional stocks and bonds, will be crucial to achieving longer-term objectives.
"It's not about increasing 'risk exposure' but improving 'growth exposure,'" added Mr. Kshatriya. "Investors need to look at adding non-traditional asset classes such as global infrastructure and real estate, high yield bonds and emerging markets debt, which can provide an additional layer of diversification that may not be represented in the more traditional approaches."
Specifically, the research suggests that broader diversification comes in three ways: First, improving the global macro focus by adding exposure to global and emerging markets equities. Second, fixed income exposure should become considerably more global with the inclusion of emerging markets debt and global high yield bonds. Finally, "real assets" such as global infrastructure, global real estate and commodities provide additional sources of income, diversification and potential inflation protection.
About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Working with institutional investors, financial advisors and individuals, Russell's core capabilities extend across capital market insights, manager research, portfolio construction, portfolio implementation and indexes.
Russell has approximately $173 billion in assets under management (as of 3/31/2013) and works with over 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.6 trillion in assets under advisement (as of 12/31/2012). It has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell traded more than $1.4 trillion in 2012 through its implementation services business. Russell also calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, which includes more than 80 countries and more than 10,000 securities. Approximately $3.9 trillion in assets are benchmarked to the Russell Indexes.
Headquartered in Seattle, Washington, Russell operates globally, including through its offices in Seattle, New York, London, Paris, Amsterdam, Sydney, Melbourne, Auckland, Singapore, Seoul, Tokyo, Toronto, Chicago, San Diego, Milwaukee and Edinburgh. For more information about how Russell helps to improve financial security for people, visit www.russell.com or follow @Russell_News.
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SOURCE: Russell Investments Canada Limited
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