With bond yields rising, inflation remaining stubborn and US stock markets increasingly dominated by a handful of technology giants, are investors rethinking how they build portfolios?
Eric Louw, senior investment manager at Aberdeen, joins Asset Allocator to explain why the firm has been reducing exposure to riskier assets, increasing allocations to government and investment-grade corporate bonds, and finding new opportunities in infrastructure and global equities.
Speaking to Aamina Zafar and David Thorpe, Louw discusses whether higher bond yields are here to stay, why shorter-duration bonds currently appeal to Aberdeen, and how infrastructure investments can provide diversification and protection against inflation.
The conversation also explores the risks of relying too heavily on the Magnificent Seven and the AI investment boom, alongside opportunities in UK and European small-cap stocks, Japanese equities and emerging markets.
Louw also shares the investment lessons of the past five years and explains why disciplined portfolio construction could be more valuable than attempting to predict the next market shock.
Timestamps
00:00 - Introduction: Aberdeen's asset allocation strategy
02:17 - How infrastructure performs when bond yields rise
06:13 - Short-term vs long-term bonds: Managing duration risk
08:43 - Looking beyond US equities and the Magnificent Seven
10:08 - Opportunities in Asia and emerging markets
13:25 - Why genuine portfolio diversification matters
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