Why it pays to use the best of alpha and beta strategies

ON EUROPE

With bond yields continuing near all-time lows, investors at the same time should not underestimate the risk in bonds. Therefore, equities remains an asset class to be considered.

Yet many remain wary, despite favourable company valuations, after the stock market’s gyrations in 2008 and 2011. We think equities can still provide opportunities, as long as investors have the right strategy for the right market. When betting on opportunities in times of economic uncertainty, it is obviously important to take advantage of both alpha (returns generated from active management) and beta (returns earned from passive equity exposure).But it is also vital to control risks. So investors should be flexible both about how much beta exposure they take and the type of alpha ex...