This episode is a follow-up discussion to a previous podcast from December 2022, titled Tickling the Dragon’s Tail.
2022 left investors scrambling to preserve capital and find alternative sources of return. Both equities and bonds across the globe suffered in the high inflation and rising interest rate environment. The S&P 500 Index ended the year at -18.1%, the MSCI EAFE Index ended at -14.5%, and the Bloomberg Aggregate Bond (US Agg) Index ended at -13.0%.
The systemic impact of increased illiquid asset holdings in times of market stress is a sleeping dragon that, once awoken, could create havoc on liquid and illiquid portfolios. Trevor Lavin, head of Allspring’s Institutional Client Group in the Western region, discusses this with Kevin Kneafsey, senior investment strategist with the Multi-Asset Solutions team.