January edition: Cyclical inflation, wealth management challenges, economic and market outlook webinar and get to know Zeenat Patel.

Welcome to our January edition of Navigating Investments, a monthly newsletter bringing you our best investment and research ideas addressing key themes facing professional investors like you.

We hope the content helps you invest with confidence.

Where are we in the inflation cycle?

Source: Mercer, January 2023

As cyclical inflation subsides, will structural inflation survive? Inflation was clearly central to 2022’s regime change. Multi-decade highs in inflation led to an aggressive monetary policy response, slowed down consumer spending and ended with almost all asset classes falling in absolute terms with the exceptions of energy, commodities and the US dollar.

We entered 2022 warning about higher inflation risk and positioning reference portfolios towards diversified inflation protection to make them robust in a number of scenarios, including the overheat scenario of central banks scrambling to rein in inflation. This was the scenario that actually materialized over 2022 to the detriment of markets. Now, even as there are tentative signs of cyclical inflation subsiding and the monetary policy tightening cycle approaching its peak, investors should remain on alert, as the regime has changed, especially in regards to inflation.

2022 has been the year of inflation surprise and rapidly rising yields, where shock absorbers such as commodities, which have a strong “inflation beta”, have done remarkably well. Positioning portfolios for a new regime means a re-orientation of inflation protection towards longer-term assets with inflation-sensitive revenues, and a readiness to manage portfolios dynamically as both business cycles and inflation cycles evolve.

Chris Canstein and other strategic research professionals dive into other aspects of this regime change that will impact the way we all invest in 2023 and beyond.?

Wealth managers are looking to position portfolios for increasingly unforgiving markets

Wealth managers face a combination of issues as global markets enter yet another period of uncertainty while their clients demand sustainable returns – so how are they meeting these challenges?

In this podcast, ?Mercer-Investment colleagues and special guest Urs Bolt,?come together to discuss the key findings from the 2022 global wealth management investment survey as well as the possible action points to help wealth managers around the world take the next step on their client and growth journey.

Our global Economic and Market Outlook for 2023: Will it bend or will it break?

We enter 2023 facing a barrage of uncertainties as economies and markets are pulled in multiple directions. There are countless questions:

?? How long and how deep will recessions be in developed #markets?

?? Has #inflation peaked?

?? When will central banks return to a looser monetary policy?

?? Could a recovery in #China lead to renewed inflationary pressure around the world?

For #investors, the crucial questions are even more direct: what is the outlook for financial markets, and where can value and security be found?

In a webinar on Feb 3, 2023 2:00 PM GMT (9:00 AM EST) Rupert Watson will address these questions and what he’s seeing from the #economy so far this year. He’ll interview Rich Nuzum to hear perspectives from his time at the World Economic Forum Annual Meeting. ?Register now!

This month, we’re delighted to feature Zeenat Patel who is a client portfolio manager, focusing on alternative investments. Based in London, she has experience working with institutional clients across emerging markets and supporting new business opportunities across research, advisory and investment solutions.

Prior to joining Mercer, she started her career at AlexForbes and was responsible for overseeing and managing all private markets strategies in South Africa spanning various aspects of investment consulting and actuarial services to retirement funds while providing support to the CEO of AlexForbes Investments on key strategic projects.

When you visit Zeenat’s LinkedIn profile, you’ll notice her background picture is of farmland near her hometown in Newcastle, South Africa where she has fond childhood memories of spending time at the farm horse-riding, playing in the streams and taking country walks with her family.

Make sure you ring her “follow bell” to keep up with all of her content, perspectives and conversations on LinkedIn.

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Thanks for reading the Navigating Investments newsletter and let us know in the comments below what topics you’d like to see in our next edition.

Important Notices and Disclosure ??