Multi-Asset Solutions Team

Latest asset allocation views

February 2024

Asset allocation views: proceed with caution

There were a number of key economic and market themes in flux in 2023, most notably a global economic environment that held up stronger than most market participants predicted. As 2024 gets under way, we look at some of the themes driving our asset allocation outlook.

Watch video

Key global themes

The global growth picture remains uncertain despite displays of resilience in parts of the world. We’ve identified three key themes that could influence the way we think about asset allocation in the coming months.

  • Past peak, but timing on rate cuts will vary

    • Globally, the tightening cycle is over and global easing has begun. Major central banks have indicated rate cuts as their next likely move, provided inflation continues to moderate. 
    • Markets are currently pricing in the first U.S. rate cut for March, which we believe is unlikely. Our outlook suggests June. This would require a repricing of expectations, which we anticipate would be a painful trade for risk assets, such as credit and equity.
    • Within our portfolios, we’re moving away from credit risk and increasing duration to improve risk/return balance. 
  • A widening of investment opportunities

    • 2023 saw exceptional strength from a small basket of U.S. large-cap technology stocks as earnings soared amid optimism surrounding artificial intelligence among other factors. 
    • In 2024, the expanding breadth of U.S. corporate earnings strength could benefit undervalued areas of the market, including small-cap and high dividend stocks, as well as traditional value sectors such as financials.
    • Globally, desynchronization in economic growth could present an opportunity as economies tied to manufacturing (in Europe) may be exiting a recession as economies tied to services (the United States) may be entering a period of slower economic growth. Within emerging markets, nimbleness will be key in navigating an ever-changing investment landscape.
  • Economic growth expected to slow

    • Economic growth remained resilient in 2023, particularly in the United States, supported by consumer optimism and employment strength.
    • However, the lagged effects of aggressive central bank tightening are still working through the economy, which will likely lead to slower economic growth in 2024. 
    • As a result, uncertainty and volatility may increase, leading to the potential for attractive opportunities for investors.

Source: Manulife Investment Management, February 2024. These views are updated on a quarterly basis. This commentary is provided for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. No forecasts are guaranteed. 

Active asset allocation views

Asset class focus

Private credit: a favorable and growing alternative asset class

Private credit involves lenders offering customized debt solutions to borrowers who are often midsized, well-established borrowers. This debt covers a variety of purposes and sits at different levels of the capital structure, with loans typically held until maturity.

  • One of the key drivers of interest in private credit is the premium yields offered relative to comparable quality public debt. Private credit as an asset class has historically provided a sizable yield advantage over public market equivalents, compensating investors for taking on illiquidity risk.

  • The private market nature of the asset class limits price volatility as the loans aren’t marked to market daily. Additionally, these private market loans have historically seen lower default rates and higher recovery rates compared with public high-yield bonds.

  • There has been significant market growth for private credit since the global financial crisis with strong growth expected to continue. Tight credit conditions, which have been amplified by regional bank failures, have left a funding void for smaller and midsized companies that private debt will continue to fill moving forward.

Private debt global assets under management ($ billion)

December 2011–December 2023

There has been significant market growth for private credit since the global financial crisis with strong growth expected to continue. Tight credit conditions, which have been amplified by regional bank failures, have left a funding void for smaller and midsized companies that private debt will continue to fill moving forward.

Asset class returns

Asset class returns comprise the multi-asset solutions team’s expectations of how different asset classes may perform over a 5-year and 20-year-plus time horizon.

Expected returns

Source: Multi-Asset Solutions Team, Manulife Investment Management, as of January 31, 2024. Not all asset classes with forecasts are represented in every portfolio managed by the Multi-Asset Solutions Team. Data shown in the tables reflects the most recent data available. Asset class forecasts comprise inputs driven by proprietary Manulife Investment Management research and are not meant as predictions for any particular index, mutual fund, or investment vehicle. To initiate the investment process, the investment team formulates 5-year and 20-year-plus risk/return expectations, developed through a variety of quantitative modeling techniques and complemented with qualitative and fundamental insight. Assumptions are then adjusted for a number of factors. REITs refers to real estate investment trusts. USD, CAD, and CNY refer to the U.S. dollar, the Canadian dollar, and the Chinese yuan, respectively. This chart contains forecasts reflecting potential future events and is only as current as of the date indicated. There is no assurance that such events will occur, and the actual asset class return may be significantly different from that shown here. This material should not be viewed as a recommendation or a solicitation of an offer to buy or sell any investment products or to adopt any investment strategy. It is not possible to invest directly in an index. Past performance does not guarantee future results.

Multi-Asset Solutions Team

Explore our solutions

Related viewpoints

Market outlook: equities have continued to shine, but macro challenges remain

Despite the challenging trading environment, equity markets globally managed to turn in a positive performance so far this year, particularly in the United States. Learn if that's likely to change in the coming months.
Read more

Five factors influencing the effectiveness of a 60/40 portfolio

We take a look at 5 macroeconomic factors that may influence the effectiveness of a 60/40 investing approach.
Read more
Important disclosures

Investing involves risks, including the potential loss of principal. Financial markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments.  These risks are magnified for investments made in emerging markets. Currency risk is the risk that fluctuations in exchange rates may adversely affect the value of a portfolio’s investments.

The information provided does not take into account the suitability, investment objectives, financial situation, or particular needs of any specific person. You should consider the suitability of any type of investment for your circumstances and, if necessary, seek professional advice.

This material is intended for the exclusive use of recipients in jurisdictions who are allowed to receive the material under their applicable law. The opinions expressed are those of the author(s) and are subject to change without notice. Our investment teams may hold different views and make different investment decisions. These opinions may not necessarily reflect the views of Manulife Investment Management or its affiliates. The information and/or analysis contained in this material has been compiled or arrived at from sources believed to be reliable, but Manulife Investment Management does not make any representation as to their accuracy, correctness, usefulness, or completeness and does not accept liability for any loss arising from the use of the information and/or analysis contained. The information in this material may contain projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations, and is only current as of the date indicated. The information in this document, including statements concerning financial market trends, are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Manulife Investment Management disclaims any responsibility to update such information.

Neither Manulife Investment Management or its affiliates, nor any of their directors, officers or employees shall assume any liability or responsibility for any direct or indirect loss or damage or any other consequence of any person acting or not acting in reliance on the information contained here.  All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their particular situation. Neither Manulife, Manulife Investment Management, nor any of their affiliates or representatives is providing tax, investment or legal advice.  This material was prepared solely for informational purposes, does not constitute a recommendation, professional advice, an offer or an invitation by or on behalf of Manulife Investment Management to any person to buy or sell any security or adopt any investment strategy, and is no indication of trading intent in any fund or account managed by Manulife Investment Management. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Diversification or asset allocation does not guarantee a profit or protect against the risk of loss in any market. Unless otherwise specified, all data is sourced from Manulife Investment Management. Past performance does not guarantee future results.

Manulife Investment Management

Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship to partner with clients across our institutional, retail, and retirement businesses globally. Our specialist approach to money management includes the highly differentiated strategies of our fixed-income, specialized equity, multi-asset solutions, and private markets teams—along with access to specialized, unaffiliated asset managers from around the world through our multimanager model.

This material has not been reviewed by, is not registered with any securities or other regulatory authority, and may, where appropriate, be distributed by the following Manulife entities in their respective jurisdictions. Additional information about Manulife Investment Management may be found at

Australia: Manulife Investment Management Timberland and Agriculture (Australasia) Pty Ltd, Manulife Investment Management (Hong Kong) Limited. Canada: Manulife Investment Management Limited, Manulife Investment Management Distributors Inc., Manulife Investment Management (North America) Limited, Manulife Investment Management Private Markets (Canada) Corp. Mainland China: Manulife Overseas Investment Fund Management (Shanghai) Limited Company. European Economic Area Manulife Investment Management (Ireland) Ltd. which is authorised and regulated by the Central Bank of Ireland Hong Kong: Manulife Investment Management (Hong Kong) Limited. Indonesia: PT Manulife Aset Manajemen Indonesia. Japan: Manulife Investment Management (Japan) Limited. Malaysia: Manulife Investment Management (M) Berhad  200801033087 (834424-U) Philippines: Manulife Investment Management and Trust Corporation. Singapore: Manulife Investment Management (Singapore) Pte. Ltd. (Company Registration No. 200709952G) South Korea: Manulife Investment Management (Hong Kong) Limited. Switzerland: Manulife IM (Switzerland) LLC. Taiwan: Manulife Investment Management (Taiwan) Co. Ltd. United Kingdom: Manulife Investment Management (Europe) Ltd. which is authorised and regulated by the Financial Conduct Authority United States: John Hancock Investment Management LLC, Manulife Investment Management (US) LLC, Manulife Investment Management Private Markets (US) LLC and Manulife Investment Management Timberland and Agriculture Inc. Vietnam: Manulife Investment Fund Management (Vietnam) Company Limited.

Manulife, Manulife Investment Management, Stylized M Design, and Manulife Investment Management & Stylized M Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license