Global Asset Allocation Team Market Update – March 2023

After a roaring start to the year, a wave of risk aversion swept up the financial markets in February. Hopes for an imminent end to rate hikes and a dovish policy pivot were dashed in the wake of unrelenting signs of resilient growth, an overheated labour market, sticky inflation, and some hawkish central bank rhetoric that prompted a shift in investor expectations towards higher interest rates for longer and quashed the optimism that spurred the powerful market rally at the beginning of 2023. Volatility resurfaced in response and most major asset classes lost some notable ground over the last month, underscoring the case for private markets strategies in a well-diversified portfolio.