Why multi-asset matters Why multi-asset matters Why multi-asset matters

Why multi-asset matters

Thought Starters 2 minutes to read

Saxo Bank

Summary:  In today's global markets, geopolitical and economic risk are ever-present. To protect your portfolio, you'll need a strategy that defends against those risks. For many traders, multi-asset trading is becoming their tool of choice, not only to mitigate risk but also to capitalise on the markets' volatile movements.


Discover over 35,000 tradable instruments across all asset classes

Interesting times
The ancient Chinese curse “May you live in interesting times” has probably been on every trader’s mind during 2019. The impact of the US-China trade war on financial markets has been considerable, wreaking havoc on the tech, auto and agriculture sectors. In May 2019, when the US announced it was increasing tariffs from 10% to 25%, the S&P and the Dow both fell over 2% over the following week. The damage was even higher for the tech-heavy Nasdaq, which fell more than 3.3%.

And it’s not just the US markets being jolted by economic and political events. The trade war waves have reached Germany, where weaker demand for machinery and cars has seen exports decline, while the UK is still being rocked by the fall-out from Brexit, causing significant volatility in the British pound.

Risk mitigation through diversification
While economic uncertainty is seemingly becoming the new normal, pursuing a diversified trading strategy through multi-asset trading is a way for traders to mitigate unsystematic risk. More specifically, by diversifying not only across sectors and geographies, but also across asset classes such as stocks, bonds, commodities and currencies, investors can reduce asset-specific risk and smoothen out the overall volatility within their portfolios.

Tactical asset allocation
The basis behind tactical asset allocation is the assumption that certain asset classes, sectors, or geographies perform better during different stages of the macro-economic cycle. Therefore, it is critical for investors to identify the asset classes, sectors or markets that relatively outperform in each stage. As such, tactical asset allocation is an active trading strategy that advises investors to adjust the composition of their portfolios in order to take advantage of cycle-specific price fluctuations across sectors, markets and asset classes. Read our analysis on which sectors to be overweight during recessionary markets.

The industry’s leading multi-asset trading platform

As a pioneer in multi-asset trading, we early on identified the benefits of trading across asset classes, sectors and geographies. Today, Saxo provides access to more than 35,000 tradable instruments through our award-winning trading platform: SaxoTraderGO.

Try SaxoTraderGO now and explore multi-asset trading.


Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.