The next decade – a changed landscape for strategic asset allocations

IN OUR latest edition of Horizon, our 10-year view on economies, return projections across 56 asset classes and strategic asset allocations, the overarching theme is scarcity, and what the various forms of scarcity – of resources, commodities, labour – and growing political polarisation mean for investment decisions.

We believe that the economic and political framework of the past decade is gone, leading to a very different investment landscape that calls for a changed approach to asset allocation.

Scarcity of natural resources and labour weighs on growth and drives inflation

Increasing competition for natural resources and the drop in working-age populations across most major economies will be key issues in the next decade. Scarcities of these sorts will affect economic growth potential and put upward pressure on inflation, which we believe will remain structurally higher than before the pandemic.