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Brendan Murray’s guide to navigating uncertain macro weather

In this video interview, Putnam Investments’ Brendan Murray explains how growth and inflation impact the performance of different investment strategies.


Dylan Emery

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Precious metals are thought of as inflation hedge. In periods of above average growth and inflation that holds true, but once growth gets below average, performance gets down to virtually zero, even if inflation remains above average.

Multi-strategy and global macro combined do remarkably well in every economic scenario over the past 20 years. Above average inflation combined with below average growth is the only exception: multi-strategy underperforms in such a scenario.

Today’s main challenge is diversifying away from equity risk, according to Murray. However, adding credit to your portfolio doesn’t give you the negative correlation to equity risk you are looking for. Instead, investors should look for risk factors beyond just corporate credit or interest rate risk, he says. “Try to look at mortgage credit risk, prepayment risk and liquidity risk to build portfolios that are better diversified.”

Message from Putnam Investments: 

This material is prepared for use by institutional investors and investment profession­als and is provided for limited purposes and is not for onward distribution to, or to be relied upon by, retail investors and any other persons who are not institutional investors. Any references to asset classes and financial markets are not intended to be, and should not be interpreted as, recommendations or investment advice. The views/opinions expressed in this video are those of Putnam Investments/ the speaker at the time of publication and are subject to change at any time without notice and should not be taken to constitute a recommendation for investment in any specific stock, area or product. Past performance is not a guarantee of future results. As with any investment, there is a potential for profit as well as the possibility of loss.