Dominic Kohler, head of investment and client solutions at Brown Shipley, a Quintet Private Bank, reflects on the resilience of traditional assets, equities and bonds, amid inflation, volatility, and a new generation of investor expectations.
Marked by rapid macroeconomic shifts, traditional asset classes such as equities and fixed income are being tested like never before. According to Kohler, the investment landscape is one of complexity and opportunity where prudence, adaptability, and trust are more valuable than ever.
“We have been navigating a challenging environment over the past couple of years,” Kohler notes. “High interest rates, sustained inflationary pressure, volatile markets and continued geopolitical uncertainty” have reshaped how traditional assets are perceived and deployed.
For equities, Kohler stresses, “being more selective; quality and resilience matter more than ever.” On the fixed income side, the outlook has brightened. “Things are looking up again now that yields are more attractive.”
This combination of cautious optimism and tactical flexibility underscores Brown Shipley’s broader approach. “It’s a market where careful positioning is key – with a focus on the long term whilst also looking for opportunities as and when they present themselves.”
Even as inflation shows signs of cooling, Kohler maintains that preserving wealth remains a core priority especially for private clients seeking long-term stability.
“Apart from capital appreciation, our investment philosophy also includes a focus on wealth protection,” he explains. “Even with inflation starting to ease, this remains key. Quality shares and government or corporate bonds remain reliable tools to help us deliver on our philosophy.”
While new asset classes and financial innovations continue to emerge, Kohler believes in the continued importance of traditional investments. “We are convinced that – even with changing market conditions, new asset classes and product innovation – traditional assets will continue to play a key role.”
Brown Shipley employs a flexible yet disciplined approach to asset allocation, allowing it to respond quickly to market developments without losing sight of long-term objectives.
“We have a dynamic asset allocation approach,” Kohler explains. “We actively adjust our positioning as the market changes, always guided by our long-term outlook but responsive to short-term shifts.”
During periods of heightened volatility, this might involve reducing exposure to riskier assets like equities and increasing allocations to higher-quality bonds. “Within equities, we lean towards sectors and companies that are better positioned to weather uncertainty,” he adds. “On fixed income, with yields now more attractive, bonds have become an effective tool not only for capital preservation but also income generation.”
While traditional assets form the core of most portfolios, Kohler highlights the growing relevance of alternatives in achieving true diversification.
“It’s all about finding the right mix,” he says. “Alternatives can help reduce risk, increase diversification and provide an illiquidity premium.” Private markets, in particular, are gaining traction especially with younger, more growth-oriented investors.
However, Kohler offers a word of caution. “Private markets are complex and often poorly understood. Clear communication and positioning of the benefits – and risks – is therefore important.”
Despite the rise of alternatives and digital investments, Kohler remains confident in the long-term performance potential of traditional assets.
“We are focused on providing consistent risk-adjusted returns over the long term,” he says. “Traditional assets still have a strong role to play. They can offer stability and consistency, particularly when clients see uncertainty and risk in the market.”
Moreover, risk management is central to Brown Shipley’s investment philosophy. Through its parent company, Quintet, the bank partners with BlackRock to gain access to cutting-edge risk assessment tools.
“As part of our partnership with BlackRock, we utilise best-in-class risk management tools to stress-test portfolios and consider various market scenarios,” Kohler explains. But numbers alone aren’t enough. “It is critical that advisers are close to clients and understand what is most important to them – spending time with them and ensuring their strategy remains aligned to their investment objectives and personal circumstances.”
Where geopolitical developments can move markets overnight, Kohler’s advice is to remain level-headed.
“Whether elections, conflicts or tariff announcements, we look at how such events may affect markets and adjust portfolios as required,” he says. “However, as we have seen at the start of this year, it is key to filter out the noise – whilst it is important to seek out opportunities, sometimes standing firm in our positioning can be the best course of action in the long run.”
Looking ahead, Kohler sees several forces reshaping the future of traditional investing from regulatory shifts and product innovation to the expectations of younger investors.
“We are in the midst of the largest wealth transfer in history,” he says. “Younger investors have an increased focus on thematic and sustainable investing. We are continuing to evolve our product offering accordingly, providing clients more choices about how their wealth is managed and invested.”
Environmental, Social, and Governance (ESG) considerations are increasingly front and centre. But Brown Shipley’s approach is personalised rather than prescriptive.
“ESG is often about deeply held beliefs, reflecting the individual values of the families we serve,” Kohler explains. “That’s why we do not impose our values but rather offer our clients a wide range of choices so they can invest in alignment with their values.”
Incorporating ESG, he notes, is also a matter of sound investing. “Investors are constantly seeking to limit their investment universe by excluding poorly run or excessively risky companies. Incorporating ESG metrics is an attempt to evaluate and avoid risk – and identify opportunities – based on factors not always associated with investment decisions in the past.”
While the human relationship remains at the core of client service, technology is playing an increasingly important role in portfolio construction and management.
“Technology helps us make more informed decisions faster,” Kohler says. “We have a number of key partnerships that have given us access to market-leading technology that our clients benefit from as they feed into our internal processes and decision-making.” Still, he adds, “human interaction and judgement remain essential.”
Traditional assets continue to offer a solid foundation for wealth preservation and growth.
For Brown Shipley, it’s not just about selecting the right stocks or bonds, it’s about building long-term trust, leveraging innovation responsibly, and staying anchored to what matters most to clients.
As Kohler puts it: “With the right allocation and solid instrument selection, traditional assets can continue to deliver superior long-term returns.”
“Enduring value: Traditional assets with modern strategy” was originally created and published by Private Banker International, a GlobalData owned brand.
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