12 MARKET VIEW
As traditional diversification instruments are working less and less, Asbjørn Trolle Hansen and his team rely on risk premia to counterbalance risk assets. This has enabled them to successfully navigate even the most difficult market conditions. Right on course
After suffering one of the most powerful shocks in recent market history, risk assets have re- bounded strongly since the sharp Covid- inspired sell-off in early 2020 . In fact, fuelled by unprecedented monetary and fiscal intervention, many markets have reached all-time highs over the course of 2021. While previously unloved value- style equities surged in the months after news of a successful vaccine, the rise has yet to prove sus- tainable as growth-style stocks have rebounded. As for government bonds, assets traditionally used for defensive purposes, yields remain anchored at historically low levels. New answers to an old dilemma Even though the world today is very different from how it was before the pandemic, the dilemma for investors appears eerily similar: equities remain at historically stretched valuations and government
bonds appear to offer little cushion for comfort. As a result, Asbjørn Trolle Hansen, Head of Nordea Asset Management’s (NAM) Multi Assets Team, believes the old-fashioned way of constructing a multi-asset portfolio may have reached its limits. “We believe traditional diversification is no longer able to protect investors to the extent they have been used to, and it is getting more difficult to find diversification in this increasingly complex market environment,” Trolle Hansen says. Fortunately, NAM’s Multi Assets Team – which was established in 2004 and today manages more than EUR 100bn – looks beyond traditional asset classes and seeks to exploit opportunities available in alternative risk premia. NAM’s Alpha MA range of liquid alternative vehicles are pure examples of this differentiated approach to multi-asset invest- ing, which has proven its resilience in times of
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