FF/AA

Future fund asset allocations. No particular thoughts attached to the below, I just like to note what they are. Lots of unlisted stuff, private equity, sizeable Alts and infrastructure exposures.

They’ve been worried about persistent inflation upending the merits of the iconic 60/40 portfolio, and so have added/prioritized lots of other stuff.

We’ve gone somewhat the other way, deciding that a) inflation would be tamed (so far, that is looking reasonable, although it’ll be a big forthcoming week (till 31 Jan) on the inflation front with PCE for the US and the quarterlies for Aus) b) that the repricing in bonds was very unpleasant, but, having gone through it, buying AGB’s at 4.3% and US treasuries at 4.1% was the sort of thing that had historically worked out very well.

As such less complexity, rather than more, was preferable.

Their EM exposure is punchier than ours, although we’ve been bolstering up our exposures (from very low nearish zero single digit exposures) as the emerging markets have underindexed (i.e. massively underperformed, and thus offers more compelling relative value).

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