Respecting Three Centuries of Correlation
In recent decades, negative correlations between stocks and bonds have been a tailwind for asset allocators, but negative correlations have been the historical exception, not the rule. Investors may need to change their expectations given the potential for a reversal of negative real interest rates and a shift in the stock-bond correlation. We think the combination of multiple asset managers in the same asset class and differentiated alpha levers can improve portfolio efficiency
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