Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Don't underestimate the benefits of portfolio diversification.

A well-diversified portfolio can ride waves of market volatility,

and new Morningstar research found. That's what happened in 2025, when uncertainty emerged at

times during the generally bullish market. The report identifies which asset classes perform well

and which didn't, and how the classic 60-40 portfolio fair. So what are the

biggest challenges for portfolio diversification today? Joining me is Amy Arnott, who is one of the

co-authors of the 26th diversification landscape report. Welcome back to the podcast, Amy. Nice to see you.

For sure.

So let's talk about how this year's market trends are unfolding before we dive into your team's research.

Geopolitics, rising inflation, and the interest rate outlook are weighing on investors' minds.

How are these circumstances showing up in the markets?

Well, as you mentioned, there's a lot of things going on around the world with the war,

rising inflation, volatility, and energy prices. But overall, the markets have actually not

been more volatile than usual. If you look at volatility for the U.S.

equity market, for example, it's actually slightly lower than the long-term average. So I think

that, you know, investors might see headlines and think there is a lot to worry about. And

certainly there are things to be concerned about, but the market seems

to be kind of brushing that off, at least when it comes to U.S. equities. Although we have seen

more volatility than usual in a couple places like gold and long-term treasuries.

We're recording this episode in early June.

Which asset classes are leading so far in 2026?

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