More than 4 in 10 (42%) of advisors say they are positioning their clients’ portfolios defensively amid expectations of increased volatility. However, they face challenges in implementing these strategies, with nearly half (45%) struggling to find safe assets. This raises questions about the suitability of the 60/40 portfolio, with almost 3 in 10 (27%) saying the model no longer works.
“The 60/40 portfolio model had a year to forget in 2022,” said Andrew Inwood, Founder and Principal at CoreData. “As this year is likely to be another challenging year, we expect our advisors to re-evaluate their strategies based on this traditional model as they seek more innovative solutions to diversify their portfolios. I have.”
On the other hand, the difficult situation is pushing US advisors to active managers.
Nearly 4 in 10 (38%) say they will increase their allocation of clients to active funds over the next 12 months. Just over a quarter (27%) plan to increase allocations to passive funds.
Elsewhere, about a third (31%) of advisors plan to increase their client allocations to ESG funds over the next year. However, one-fifth (21%) do not invest client funds in her ESG. Renewable energy enthusiasm is also muted, with more advisors set to increase their client quotas in oil and gas stocks (30%) than in clean energy stocks (27%).