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A time-tested defence against volatility

equitorialaug16Wild swings in sentiment have driven brutal spikes in volatility over the last year and are likely to continue doing so in the context of substantial macroeconomic uncertainty. How can investors gain exposure to the stocks that outperform in these conditions while avoiding short-term drawdowns?


Our answer is time-tested: diversification reinforced by a focus on strong stock fundamentals.


Key points

  • As market volatility has risen, the frequency and severity of rotations
    has also increased
  • The areas of the market impacted most vary with each rotation, making
    it impossible to forecast the outlook for regions, sectors and stocks
  • Without such prescience, diversification is essential in defending a
    portfolio against these rotations
  • This, combined with a dynamic approach to risk and an emphasis on
    strong fundamentals, enables us to weather volatility and capture upside

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