Building a resilient portfolio in a higher-rate world

For a decade, capital was cheap and duration was rewarded. That regime has ended, and the discipline required from allocators today looks very different from the one that worked through the last cycle.

We build balanced mandates around three layers: a liquidity sleeve that covers eighteen months of client drawdowns, a core sleeve of investment-grade credit and quality equity, and a satellite sleeve where we take deliberate, sized risk.

The satellite sleeve is where conviction lives, but it is never where survival lives. Sizing is the strategy. A position that cannot be held through a drawdown was never a position, it was a trade.

Clients reviewing their mandate this quarter should focus on two questions: is my liquidity sleeve genuinely liquid, and am I being paid enough for the illiquidity I already own?