Rebalancing for a rate-normalised decade.

Most long-horizon portfolios were built for a world that no longer exists. Between 2010 and 2022, zero rates compressed discount rates, lifted every risk asset simultaneously, and made duration almost free. The rebound in rates has ended that regime; the rebalancing has barely started.

Three practical consequences. First, sovereign duration is once again a portfolio tool, not a bet. Second, quality credit offers a real yield that competes with listed equity on a risk-adjusted basis for the first time in a generation. Third, private-market valuations that were normal at zero rates now need to re-price — the denominator effect has not yet fully flushed through Q4 statements.

Our guidance to principals is simple: stop thinking about "60/40 versus alternatives" and start thinking about what each line item is actually paid to do. Inflation protection, income, duration, and growth are separate objectives that require separate instruments. The next decade rewards clarity of mandate, not elegance of allocation.