César Pérez Ruiz, Chief Investment Officer, Pictet Wealth Management, on Macro strategies, Volatility as an asset class & Short-term, high-quality Asian credit.

1. Macro strategies

Macro hedge funds are well positioned to benefit from the significant economic and policy divergences around the world. In addition, their correlation with equities is low and we are now seeing these strategies start to outperform developed-market equities. This follows our Who pays the bill 2022 investment theme, as the costs associated with the pandemic and other events are unevenly distributed.

2. Volatility as an asset class

As major economies like China continue to grapple with covid and unknowns around potential future variants remain, our It’s not over till it’s over theme will continue to play out this year. As market volatility remains elevated, we will look for tactical opportunities to play volatility as an asset class, hedging where possible.

3. Short-term, high-quality Asian credit

Looking at spreads per turn of leverage, short-duration investment-grade Asian credit now looks compelling. This plays to our Too big to fail theme, as governments like China’s continue to unleash supportive policy measures.