Havens or haven nots?
Traditional safe havens have delivered mixed results. Government bonds and gold both declined during the March selloff, defying their typical defensive roles, while the US dollar stood out as the primary refuge, supported by safe haven flows and the country’s position as a net energy exporter.
Equity markets are also undergoing a shift in leadership and while energy stocks have posted gains, broader defensive sectors have not consistently delivered protection. Instead, investors have gravitated toward large-cap technology names and infrastructure-related assets, reflecting a preference for companies with strong balance sheets and resilient revenue streams.
Fixed income markets
Fixed income markets tell a similarly complex story. Yields climbed sharply in March as inflation fears outweighed the usual flight-to-safety demand for bonds. While some late-month buying emerged, elevated yields suggest investors are still demanding compensation for persistent inflation risks.
Looking ahead, markets appear caught between two competing forces: near-term geopolitical uncertainty and longer-term structural themes such as artificial intelligence and emerging market growth. While de-escalation could refocus attention on those secular drivers, the report suggests that risk premiums, particularly in energy, may linger even if tensions ease.
For advisors and investors, diversification strategies may need recalibration as old assumptions about safe havens and defensive positioning are put to the test in a more volatile, inflation-sensitive world.