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Strategies that offer allocation across geographies, asset classes, and investment styles help to provide a ready-made source of diversification – a vital tool for investors looking to manage market concentration. Funds that focus on income, or income alongside growth, often lend themselves to these diversification benefits.

Naturally these funds tend to be less concentrated by style compared to the broad market, due to holdings that focus on high-quality dividend payers.

They’re able to capture the strong tech earnings and AI momentum but also companies that benefit from growing demand for power and infrastructure, for instance.

We’re looking to strategies that can harness cyclical stories, too – those that might benefit from the easier monetary and fiscal policies to come. For example, financial companies that will do well from deregulation, and small caps, which are likely to catch up over the year ahead as policy support filters down through the economy.

As a multi asset investor, I’m also free to look for regional diversification. I’m actively looking towards those countries in Asia like Korea and Japan, which are benefiting from improving corporate governance, and China for its policy support.

Beyond equities, this year we have preferred allocation to emerging market local currency bonds within fixed income. This allocation has benefited from benign inflation in major EM economies as well as the soft dollar. I’m able to be tactical around fixed income, moving nimbly to find the best risk-adjusted source of yield.

But as well as the upsides, investors should always be mindful of downside protection. Volatility can be managed with the tactical use of option strategies, for example. They proved their worth throughout 2025 when tariff-induced uncertainty exposed those with fewer defensive buffers. I expect volatility to feature throughout the next 12 months, even if the overall environment is positive for risk.

Becky Qin

Becky Qin