Here Be Dragons

Having been used by early mapmakers to symbolise uncharted and yet-to-be discovered territory, the phrase ‘Here be Dragons’ has entered the lexicon in reference to the basic human fear of the unknown. The current seismic shift in economic, social and political themes has made the macro investment landscape feel like uncharted waters, with the lure of riches and fear of doom in equal measure. Several significant macro forces have gone into reverse: globalisation to nationalism and reshoring, deflation to inflation, quantitative easing to quantitative tightening, energy and food security to insecurity, global cooperation to sanctions and fragmentation. In keeping with the analogy, we will show where portfolio stresses have gone ‘off-the-charts’, what the new economic paradigm looks like and why we feel that trend following strategies are best placed to navigate this enduring period of heightened uncertainty.