Using barbell approach to achieve desired outcomes
SINGAPORE (June 12): Both institutional and private wealth investors have historically allocated to outcome-oriented strategies. Outcome-oriented investing is an investment approach that considers achievement of desired outcomes in addition to return and risk objectives. Asset owners have embraced a diversified and balanced approach, including yield-seeking strategies across asset classes. In addition, sovereign wealth funds have paid more attention to environmental, social and governance (ESG), generally — and climate change-related outcomes, specifically — over the past few years.
On the other hand, some wealth managers and advisers historically adopted a “high-conviction” approach, allocating to active funds with targeted outcomes or deploying discretionary portfolios backed by high-conviction ideas. Is there a way to marry the two disparate approaches? We examine three examples in this article.
