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As geopolitical tensions and inflationary pressures unsettle global markets, Asian investors are increasingly turning to multi-asset portfolios to balance risk and opportunity.
In an interview with The Asset, Trevor Slaven, global head of asset allocation and multi-asset portfolio solutions at Barings, highlights the importance of flexibility and diversification in navigating the next 12-14 months. Based in Charlotte, North Carolina, Slavern is currently visiting clients in Singapore and Hong Kong.
Slaven notes that shocks such as the energy crisis resulting from the Middle East conflict are driving inflation higher and rattling sentiment.
“It’s really hard to find a place to hide right now,” he says, pointing to simultaneous sell-offs in global rates and equities. But he stresses that multi-asset portfolios remain the most resilient approach, enabling investors to dial up or down the risks depending on market conditions.
Barings’ recent strategy call, aptly titled “Stabilize Your Core”, focuses on maintaining a conservative, less volatile portfolio to preserve capital, while keeping the powder dry to be able to exploit dislocations when markets cheapen.
Strong earnings momentum
Despite near-term volatility, Slaven sees strong earnings momentum across sectors. “We’re seeing earnings growth that’s about as good as it’s been in the last four years,” he notes. “Importantly, growth is broadening beyond US technology into cyclical and value sectors, as well as Europe and parts of Asia.”
This dispersion, driven partly by AI disruption, means investors can achieve outsized returns from smaller equity allocations. “You can make your year in a few months,” Slaven says. “But you have to be careful that you don’t lose your year in a few weeks.”
In fixed income, Slaven highlights the appeal of high-quality credit and sovereign bonds. Credit spreads remain tight, limiting upside, but yields are attractive. “It’s really a yield story, more so than a credit spread story,” he insists, pointing to short-duration investment grade and high-yield bonds with strong security and ratings mixes.
Emerging market local rates – particularly in Latin America and Indonesia – also present value, while Japanese government bonds are beginning to look attractive after a year of pressure.
Conservative equity position
Asked whether alternatives to the traditional 60/40 equity-bond split could deliver more resilient returns, Slaven argues that flexibility matters more than rigid structures. “Maybe today that 60/40 would look more like 50/50 or even 40/60. The goal is to source three things: attractive income, total return potential, and diversification.”
Asian investors, he says, should start from a more conservative equity position, given the heightened volatility and dispersion. This allows them to redeploy into equities when valuations reset, rather than being forced out during downturns.
Private credit and infrastructure are increasingly popular among Asian investors, but Slaven warns against chasing yield without due diligence.
“Choosing your [private credit] manager wisely is paramount,” he says, noting that Barings’ private credit platform, backed by MassMutual ( its parent company ), emphasizes institutional quality and long-term alignment. With investment-grade private placements and low historical default rates, alternatives can complement multi-asset portfolios without excessive risk – provided governance and incentives are sound.
Flexibility is key
For investors in Hong Kong, Taiwan, and across Asia, Slaven says, the message is clear:
Also, Asian investors should use alternatives selectively, incorporating private credit and infrastructure with trusted managers, and start investing conservatively by building smaller equity positions that can still deliver outsized returns in the current environment.
“Flexibility is key. You want to be in a position to take advantage of big market dislocations, instead of being carried out by them,” Slaven says.
