WEBVTT

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- Hanneke, welcome.

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As CEO of one of the world's
leading asset managers,

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what are you hearing from
your clients at the moment

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about the biggest challenges
that they're facing?

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- So the biggest challenge
that they faced was that

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in 2022 the market went
through an enormous downturn.

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We saw the conditions
change in the market.

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We've had about 14, 15
years of low inflation,

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low interest rate, and
we saw that change to

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high inflation and an
increased rate environment.

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As a consequence of that, plus
also the geopolitical tension

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we've seen around the
world led by the invasion

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of the Ukraine by Russia,

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we saw markets really move

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into a more volatile world.

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We saw the value of assets decline

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and what was really different,

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which is something we
hadn't really seen before,

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is that both the value
of equities declined

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by about 20% over a
certain period of time,

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as well as the value of bonds

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because of the increases in rates.

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So the conventional 60/40 portfolio

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that many clients depended upon

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to meet their investment objectives

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had the worst returns in 40 years,

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they were down by about 24%.

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So that diversification
benefit that was meant to occur

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didn't really materialize.

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So as a consequence,
clients have moved into

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what we call, risk-off territory,

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they've switched more into cash.

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They've started to come a
bit back into fixed income

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but they've been very, very cautious

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with respect to equities

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and are really rethinking
their asset allocations.

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- So, apart from don't panic,

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what are you advising your
clients at the moment?

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- Actually, very much don't panic, right?

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You do need to think about the long term.

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It's hard when markets are more volatile

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and it's hard when there is so much change

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and when the conditions under which

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you've been running your portfolios

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have changed so dramatically.

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have changed so dramatically.

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So client engagement is
clearly key in everything we do

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and that has been even more true

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in 2022 and going into 2023.

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Now, I do think there are
two things happening in '23.

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One is we think it's likely that rates

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will stay higher for longer.

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We also think inflation will

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stay a bit higher for longer, as well.

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We do believe as a
result that fixed income

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may offer some attractive
opportunities for clients

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because yields are up and
the prices have fallen.

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So while that was not good
for portfolios last year,

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that provides good opportunities
from an entry perspective.

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I think it's going to
take some time for clients

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to really get back into
growth equity again,

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but in the meantime,
they can find good value

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in income equities and stock,

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really stocks that pay dividends

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is where we still see some good value.

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So there are some things they can do

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but they will have to
reallocate their portfolios

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and many of them are doing so.

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and many of them are doing so.

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- So, what are the key trends then

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that you are focusing on at the minute?

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- So we're focusing, in our business,

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we're not immune from those trends,

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so we've seen good opportunities
for our cash business.

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We see good opportunities for
our fixed income business.

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We also actually see very good
opportunities in multi-asset.

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So more modern version of what
was the old 60/40 portfolio,

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which you could call a
simplified multi-asset portfolio.

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We're now seeing opportunities for clients

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to invest in multi-asset portfolios

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that include perhaps gold or derivatives

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alongside fixed income
and equities securities

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to create a more outcome-oriented return

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rather than just focusing
on beating benchmarks.

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So I think there are some
very exciting opportunities

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still to be had to work with our clients

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to meet their objectives.

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- Hanneke, thank you so much.