Global asset managers warn geopolitical and AI concentration risk need a new approach to investing
They say uncertainty in macroeconomic environment is reshaping traditional view of a diversified portfolio
Global asset managers caution that geopolitical tensions and the growing concentration in artificial intelligence require a new approach to investing. Chris Hogbin, CEO of Lazard Asset Management, speaking at the Global Financial Leaders’ Investment Summit in Hong Kong, noted that geopolitical uncertainty now creates a risk premium at the start of deals rather than at the end as previously.
Richard Oldfield, CEO of Schroders, highlighted that geopolitics is driving up oil prices, which fuel inflation and increase government spending, leading to higher sovereign debt. This in turn impacts equities and reduces diversification in portfolios.
Despite overall market resilience, the concentration of trade in AI stocks has prevented the typical equity price appreciation from materializing. Richard Oldfield emphasized the need for investors to be selective about where value lies and not get overly influenced by market trends. Karin van Baardwijk, CEO of Robeco, stated that while the market is likely to remain resilient into 2027, the resilience may be uneven, primarily affecting technology and the US economy.
Tobias Pross, CEO of Allianz Global Investors, warned of challenges in funding AI infrastructure, which is more vulnerable to overleveraging. He cautioned investors to watch for low-growth, high-debt countries as capital expenditures increase. Pross noted that central banks are focused on inflation and interest rates, which presents additional challenges for investors.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
