Resilience by design: multi-asset portfolios for volatile markets

In recent quarters, investors have had to navigate a mix of geopolitical risk, inflation uncertainty and shifting interest rate expectations. In that kind of environment, portfolios built with resilience in mind tend to show their value. Multi asset strategies aim to balance growth, defensive exposures and diversification, recognising that no single asset class or style performs consistently across all market regimes.

Blending growth with defensive strength

Growth assets remain essential for long term returns, but outcomes tend to be more stable when growth assets sit alongside defensive and diversifying exposures. During the first quarter, for example, global infrastructure played an important part in the stability of our multi-asset portfolios. Its inflation linked revenues, essential service characteristics and relatively stable cashflows helped offset broader market volatility.  

It’s a good illustration of how real assets can play a dual role – supporting growth while also offering defensive characteristics, particularly when inflation concerns challenge traditional fixed income.

Diversification beyond the developed world

Emerging market exposures also contributed positively, supported by disciplined stock selection and a focus on valuation and income. While inherently more volatile, these markets can offer differentiated return drivers and diversification benefits when incorporated thoughtfully within a broader portfolio context. Recent performance was a reminder that diversification is not just across asset classes, but also about geography and investment style, especially during periods of dispersion.

The stabilising role of defensive and alternative strategies

With correlations across risk assets rising, defensive allocations have come back into sharper focus. Short duration bonds helped reduce sensitivity to rising yields, while specialist diversifying strategies played an important role by moderating drawdowns during periods of equity stress. While such investments may not be designed to lead returns in strong markets, their value lies in their potential to protect capital and smooth the investor journey - a critical consideration during volatile periods.

Resilience as an outcome of discipline

Resilience is not about predicting the next shock. It comes from accepting uncertainty and building portfolios accordingly. We believe a disciplined multi asset approach, combining growth assets, defensive exposures and diversified return sources, is well-equipped to support more consistent outcomes across market cycles.

For professional investors, recent market conditions serve as a reminder: resilience is not a reaction to volatility – it’s something to build into portfolios from the outset.