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today I'm going to be sharing observations based on the largest private bank model portfolios we've analysed worldwide.

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Last year saw the rec correlation between asset classes. Bonds, which are supposed to buffer equity losses, have actually been driving them with negative performance in the double digits for bonds and equities. More wealth has vanished last year than during the great financial crisis. Recur between assets is not the only phenomenon we have seen last year, which is typical of an influence

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environment. We have also seen an increase in concentration in portfolios, where the typical number of strategies has reduced from 12 down to eight in just five years. As a result, the diversification benefit of investors portfolios which is in essence, the proportion of the risk which is diversified away as half over just four years with the recreation between assets

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and increased concentration in portfolios. Unsurprisingly, the volatility of risk based model portfolios has increased massively last year.

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In the current environment, what investing trends do we see the investor portfolio analysis we have carried out recently show an increased allocation to money market, short term bonds, short term credit, which is the highest we have on record. Investors have also been rediscovering the benefits of non directional strategies such as fixed income Abbi C. T. A s long shot credit

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and alternative investments margin because they are uncreative to markets but also because they provide protection against inflation. On the fix income front, many of you have been telling us that bonds seem to present the greatest risk adjusted opportunities. At 5.5% US investment grade is currently yielding the same as the S and P earnings for less risk.

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Investors are also embracing imaging market debt on the back of a weaker US dollar as well as high yield, but are staying away from long term bonds for the moment, as one investor put it, inverted yield curve do not compensate for duration risk. Right now.

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On the equity front, we are seeing a return of European and Emerging market equities in investors portfolio. Last year, equities were driven mostly by rates, but this year earnings will take a central role. Will companies be able to pass the increase in labour cost and protect their margins?

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Value is also staging a comeback in equity allocations, which could be the sign of the return of active management, as is the renewed interest for alternative liquid and liquid. As one of you put it to me, wrapping four technology stocks in an ETF a few years ago during the days of Q E would have been sufficient to generate an outstanding performance. But these days are over.

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The environment is increasingly complex, and there is a demand for active management, and it is clear that the need for true expertise has never been more important.