Negative Correlations, Positive Allocations

This Asset Allocation Outlook from PIMCO, authored by Erin Browne and Emmanuel Sharef, provides insights into optimizing portfolios amid moderating inflation and soft landing prospects.

• Key Trends: The return of a negative stock/bond correlation supports diversified multi-asset portfolios, enhancing risk-adjusted returns.  
• Portfolio Strategies: Focus on U.S. equities benefiting from rate cuts and deregulation, and high-quality core fixed income with attractive yields for income and downside protection.  
• Hedging Inflation Risks: Inflation-linked bonds and real assets offer effective protection against fiscal and geopolitical shocks.

For detailed strategies to navigate rate-cut cycles and market uncertainties, access the full report.