As macroeconomic uncertainty reshapes the investment landscape, traditional portfolio models are under strain. Nathan Sweeney, CIO of multi-asset at Marlborough, highlights six critical considerations for advisers navigating the evolving world of multi-asset investing, from global diversification and real assets to the rising importance of strategic insight.
This article was featured in our Multi-asset Fund Insights 2025, looking at the latest thinking and analysis into what’s going on within this key market segment. Readers can check out the full publication here.
The world of multi-asset investing is undergoing a quiet revolution. Investors who have long relied on the traditional 60/40 equity-bond split as a source of balanced growth and resilience are finding this once-dependable formula is under pressure.
Sticky inflation, rising real rates, trade friction and a return to industrial policy have all reshaped the terrain. As a result, particularly when it comes to alternatives, strategic and tactical allocation must reflect the ever-shifting ground.
Here are six key considerations to bear in mind when exploring the potential attractions of multi-asset solutions in an age of continued uncertainty.
- The case for broader diversification
Concentrated exposure to US equities delivered outsized returns for much of the past decade, leading many investors to question the value of diversification. But recent volatility has underlined that other equity markets – especially in Europe and parts of Asia – also hold appeal, not least in light of attractive valuations and sectoral tailwinds.
Meanwhile, integrated interest rates – that is, market expectations for the path of policy rates over time – are declining across the majority of regions, excluding the US. This suggests central banks have done the heavy lifting and disinflation is gradually taking hold. The result? A more constructive outlook for government bonds, which now offer meaningful income and the scope to resume their traditional function as portfolio ballast.
These developments highlight the importance of genuinely global diversification – not just across asset classes but also within them.
- The return of “real” credit: gold’s strategic role
In a world where fiscal dominance threatens monetary orthodoxy and government balance sheets are stretched thin, gold has reasserted its role as a true alternative asset – both as an inflation hedge and as the only real credit that does not depend on anyone else’s solvency.
While fiat currencies can be printed and bonds can default, gold remains free of counterparty risk. This makes it particularly relevant today, as central banks recalibrate policy at a time when tariffs and subsidies are back on the table and geopolitical trust is at a low ebb.
For multi-asset portfolios, this hard asset can provide a valuable anchor in uncertain times.
- Infrastructure: the new low-beta equity?
Infrastructure stands out as a resilient, lower-beta equity alternative in an environment of higher volatility and greater economic fragmentation. While investors might previously have turned to defensives such as consumer staples or utilities, infrastructure’s evolving nature is now playing an even more pivotal part in modern portfolios.
What constitutes essential infrastructure is also being redefined. The energy transition, ageing grids, AI data centres and climate resilience all demand capital investment – often with government backing and long-term visibility.
In addition, amid increasing risk of blackouts and cyber threats, it is easy to see why demand for robust physical and digital infrastructure is rising. These assets often come with inflation-linked revenues and can help hedge structural risk without the cyclicality of traditional equities.
- A cautionary note on complexity
Not all alternatives are created equal. While the search for diversification has led many investors towards complex strategies – for example, structured credit, private debt and trend-following vehicles – these can carry embedded leverage and liquidity constraints or do not deliver when correlations spike.
The lesson is not to avoid complexity altogether but to understand it deeply. Investors too often pay for diversification that they do not get when they need it most.
By way of illustration, remember how novel alternatives such as music royalties failed to live up to their billing as low-volatility investments in times of stress – most notably during the COVID-19 pandemic. In contrast, simpler real assets like gold and infrastructure can be more transparent and resilient.
- From allocation to adaptation
Strategic asset allocation is no longer about plugging numbers into a model and rebalancing quarterly. It is about adaptation – recognising that the economic rules are changing, that globalisation is no longer linear and that investors must seek diversification in substance and structure alike.
Used wisely, alternatives can be a critical component of this new regime. They can provide true sources of return, protection and resilience.
As always, though, the key lies in understanding what you own and why it earns a place in your portfolio.
- Insight and experience count
Even a quiet revolution gives rise to numerous significant challenges. As the investment landscape continues to shift, insight and experience are likely to have an ever-larger role to play in the multi-asset arena.
Many multi-asset solutions are managed by sizeable teams with extensive market knowledge. For instance, Marlborough’s specialists in this field bring together more than 200 years’ worth of investment expertise.
Ideally, insight and experience should translate into informed decisions on asset allocation. In turn, these should lead to superior outcomes for investors seeking performance and protection in a fast-changing world.
About Nathan Sweeney
Nathan Sweeney is Marlborough’s Chief Investment Officer of Multi-Asset and leads the company’s multi-asset investment team. He has 25 years’ investment experience. Before joining Marlborough in 2021, he spent more than 10 years as a Senior Investment Manager at fund management company Architas, where he helped manage over £5.7 billion of client assets.
