A s we discuss in our white paper , Sunrise on Venus , long-term inflation could be substantially higher than markets expect . This is a game-changer for multi asset portfolios , as inflation can flip the ‘ traditional ’ relationship between bonds and equities . Meanwhile , high stock market valuations point to potentially disappointing returns ahead for assets that were the winners of the last decade . To thrive in the coming environment , investors might need to adjust their portfolios . Traditional 60 / 40 balanced funds , while suitable for normal booms and recessions , offer little hope of outperforming cash in a stagflation scenario . However , there are some healthy alternatives . The Orbis OEIC Global Balanced Fund is designed to navigate diverse market environments , including periods of stagflation . Our equity exposure spans several dozen stocks that we believe offer better value than fully priced world markets , providing what we think are much more attractive prospective returns . While passive funds are heavily concentrated in the US , giant companies and technology shares , most of our holdings are outside the US , mid-sized or large rather than giant , and in other sectors . Our approach to fixed income is also different . Instead of passively tracking bond indices , our portfolio comprises assets capable of weathering the challenges of stagflation . This includes inflation-linked bonds , gold , some corporate bonds and cash . We also maintain a substantial exposure to relative value , purchasing attractively valued shares and hedging out the associated stock market risk . If our stocks perform better than their local markets , this hedged equity exposure can generate positive absolute returns , irrespective of the economic climate . When you piece it all together , you get a genuinely diversified portfolio that sets itself apart from conventional 60 / 40 or passive strategies ( see below ). For investors seeking diversification and long-term returns in their portfolios , the Global Balanced Fund could play a helpful role .