Nabeel Abdoula, Deputy CIO, Fulcrum Asset Management, and Paul Seaton, Investment Director & Head of North America Distribution, Fulcrum Asset Management, discuss the progress of global economic recovery and potential risks facing investors.
At this point in the recovery from effects of the COVID-19 pandemic, the economy is in the global expansion phase of the business cycle. However, investors are still exposed to several risks, including persistent inflation and the Delta Variant. In regards to the Delta Variant, research has shown that a high enough vaccination level can provide herd immunity and lower fatality rates, so if enough people get vaccinated in time, then the Delta Variant won’t significantly derail economic recovery or delay reopening.
Periods of high inflation tend to be negative for traditional investments, and they tend to be associated with less fixed income diversification. Though inflation has shown to be transitory in financial markets, there are a number of ways to diversify from fixed income to protect a portfolio from inflation, including alternative sources of real returns like real estate and commodities, diversified tail risk hedging, and investing in defensive currencies.
The Fulcrum Diversified Absolute Return Fund seeks to deliver a profile of long term absolute returns in all market conditions over rolling five-year periods, with low sensitivity to traditional markets. The fund has a low correlation to equity markets and seeks to hedge against extreme losses. It has a flat fee structure and is available on major advisor platforms.
Fulcrum Asset Management is a research focused firm, founded in 2004 by Andrew Stevens and Gavyn Davies. Fulcrum is committed to providing investment solutions aligned with clients’ risk profile in order to deliver returns in the broadest range of market environments. Fulcrum invests across all major asset classes and geographies, and uses a process agnostic of benchmarks that focuses on economic theory, empirical evidence, and innovative risk management strategies.
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