Moving forward from a challenging year

Amidst a very uncertain market backdrop with geopolitics remaining pronounced, it is easy to overlook progress and place greater emphasis on negative events. Worries about market downturns can turn into self-fulfilling prophecies, as market participants continue as ever to be driven by fear and greed. Equally, it is important to rein in optimism as an investor, avoiding exuberance and maintaining a diversified portfolio. ​

To help investors manage the impact of market volatility whilst remaining invested, tail risk solutions are an attractive solution. Currency exposure warrants careful consideration in a volatile geopolitical environment, as deciding how much of an investment portfolio to hedge can significantly impact returns achieved.​

There is much work to be done involving the UK’s electricity grid if we are to reach net zero emissions in the UK by 2050. With a growing population and limited resources, it is important we continue to innovate; regenerative agriculture is a nascent investment that can help improve food supply and quality, whilst also using sustainable harvesting practices. ​

Equity investors have a role to play too; with a growing focus on how shareholders can achieve good governance amongst the boards managing companies of which they are an owner.

Stewardship doesn’t stop with company engagements though. Unmitigated climate change is likely to be devastating to economies. So investors also have a role in creating positive change – not only focusing on responsible governance of their own assets, but also managing systemic risks by pushing for policy change to reduce the impact on financial markets.

With Gen Z’s advocacy for ESG principles consistent with their appetite for investments, they should help drive positive change. Equally, in the UK’s retirement savings marketplace, it’s important to ensure access to financial products suited to a diverse population with differing religious requirements.​

Turning to the UK housing market, there is an interesting investment opportunity in social housing, which offers attractive returns for investors and helps achieve positive social impact.