Markets have entered a higher volatility regime as Fed tightening, end-of-cycle concerns and geopolitics come into play. This does not mean we are of the view a bear market has begun—we do not think it has. But October’s price action is a reminder that returns in multi-asset portfolios are likely to be more muted on a risk-adjusted basis, and portfolio management will probably require more tactical positioning as we move into the late stages of the economic cycle. We remain focused on leading economic data and credit spreads for signs that a genuine turn in the cycle is imminent. In this Macro Monthly we discuss our views on recent market volatility, why we believe we are in a higher volatility regime, and how we are navigating this environment in our portfolios.
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