"We are not in a situation comparable to that of the major oil crises of the past."

No historic oil shock, nor a return to the way things were! For Fabrizio Quirighetti, the new market environment calls for a different mindset. In a landscape marked by persistent geopolitical tensions, more volatile inflation, and high government deficits, he advocates for a more active investment strategy—from rethinking the 60/40 portfolio to the return of gold and the rise of major structural themes such as AI, defense, and infrastructure.

For several weeks now, the markets seem to have been questioning certain principles of diversification, particularly around sovereign bonds, the Swiss franc and even gold. Do you think we are witnessing a more profound breakdown in traditional correlations?

Traditional correlations operated in a very specific context, characterised by low inflation, relatively contained public deficits and very credible central banks.
Today, this framework has changed radically. Today's risks are more varied. An energy or geopolitical shock, for example, first causes an inflationary shock. In this type of environment, high-quality sovereign bonds no longer necessarily play their protective role. They may even become the first to be exposed to the risks of inflation, rising public spending or currency erosion.
Historically, periods of war or high geopolitical tension have never been particularly favourable for government bonds.
Today, we live in a more fragmented world, with higher inflationary risks and public deficits that are becoming a cause for concern. This does not mean that bonds will never again function as a safe haven, but their ability to diversify is no longer automatic.

Between an inflationary slowdown, an energy shock or a full-blown global recession, which scenario do you think is the most likely today?

Before the conflict between the United States and Iran, the dominant scenario was still very favourable for risky assets. It benefited from growth sustained by US, European and Japanese budget plans, inflation gradually moving towards central bank targets and the prospect of rate cuts, particularly in the US.
Since then, the market has had to revise part of this scenario. Growth is likely to remain positive, but a little weaker, while energy tensions are creating more inflation in the short term. For all that, I do not believe in a scenario of deep global recession. Economies are less energy-dependent than they were in the 1970s, so we are not in a situation comparable to that of the major oil shocks of the past. The most likely scenario therefore seems to me to be that of a slight economic slowdown accompanied by higher inflation.
In fact, historically, when the price of oil rises by $10, the impact on global inflation is generally twice as great as the impact on growth.

In an environment marked by geopolitical tensions, high public deficits and still uncertain monetary policies, how can we build an allocation today that is capable of resisting over the long term?

The first key element is diversification. The range of possible scenarios is widening considerably, and the likelihood of extreme shocks is no longer negligible.
Against this backdrop, it is becoming difficult to take excessively large bets.
In particular, we believe that gold now plays an important role in portfolios, as do certain commodities, especially industrial metals.
The needs of defence, energy infrastructure and electrification are still very great, even though supply has not increased sufficiently in recent years. Within asset classes, we also need to diversify further.
In equities, for example, emerging markets now offer interesting profiles. Asia provides technological exposure, while Latin America allows us to benefit from the momentum of commodities. In bonds, we are focusing less on duration and more on more flexible strategies, notably via certain segments of floating-rate credit. More generally, allocation management today needs to become more active and selective.

With bonds no longer necessarily playing their traditional role as a safe haven in the face of high inflation, do we need to rethink more fundamentally the classic 60/40 portfolio model?

Yes, clearly. The 60/40 portfolio worked extremely well between the 1990s and the 2008 crisis because we were in an environment of strong real growth and structural disinflation. Equities benefited from economic growth while bonds benefited from the continuing fall in interest rates.
Then, between 2010 and 2020, bonds continued to play a diversification role despite extremely low interest rates. Today, the context is different. Interest rates have risen, giving bonds back their ability to generate income, but their protective role is becoming much less obvious because of persistent inflation and public deficits.
Bonds still have a place in portfolios, but more as a source of yield than as a systematic hedge against equity market falls. This means much more active risk management and portfolio protection.

You place a lot of emphasis on the notions of quality, liquidity and simplicity in portfolios. Is this the return of a more traditional form of management after years of abundant money and sophisticated strategies?

Above all, I think that sophisticated strategies developed during the years of zero interest rates because investors were desperate to find alternative sources of return.
Today, the return of positive interest rates is once again simplifying certain portfolio constructions. In Swiss francs, it is now possible to earn around 1% on good-quality three- or five-year bonds without taking excessive risks. In euros, yields can reach 3.5% to 4%.
This makes simpler, clearer approaches more meaningful. The core of the portfolio can once again become relatively traditional, notably via ETFs or passive funds in certain pockets of the market. On the other hand, certain asset classes still require active management, notably bonds or certain more specialised segments such as small caps. Sophistication has not disappeared, but it is becoming peripheral rather than central.

Between artificial intelligence, defence, infrastructure, energy and healthcare, what major structural themes are you favouring over the next five to ten years?

Artificial intelligence, defence and energy infrastructure are clearly long-term structural trends. But it's essential not to limit ourselves to the most visible players. We need to analyse the entire value chain. In all the major investment themes, the real winners are not always those we spontaneously think of.
In artificial intelligence, for example, some companies specialising in infrastructure cooling or very specific industrial components are benefiting directly from the sector's growth without being identified as 'AI' players in the traditional sense. In the case of data centres, the operators themselves are not the only beneficiaries of market growth. The whole ecosystem of specialist suppliers who revolve around this infrastructure is benefiting.
So we also need to look at electrical systems, building automation, cooling solutions, security, energy management and network equipment.
Health, to finish with the main themes, is of course still an interesting sector, but it is currently suffering from the fact that investment flows are concentrated more on other themes deemed to be priorities, such as AI, defence or energy.