Schroders' Global Head of Multi-Asset Investments, She Kangru, stated that the global economy is expected to reach a turning point in 2024, with a potential decline in inflation and interest rates. While financial markets are preparing for interest rate cuts, it is believed that the low interest rate environment of the past is unlikely to return in the near future. Even if the Federal Reserve has the opportunity to cut interest rates in the second half of this year, it is believed that interest rates will remain at relatively high levels in the long term. Therefore, diversifying investments across different asset classes to manage inflation and interest rate changes remains crucial. Apart from traditional assets like bonds and dividend stocks, incorporating alternative investments into portfolios can expand sources of returns for investors and enhance yield. Furthermore, alternative investments have lower correlation with financial markets, their asset trends differ from stock and bond investments, thus providing further risk diversification. Convertible bonds and Insurance-Linked Securities (ILS) are two types of alternative investments that Schroders Global Investment is optimistic about in terms of potential returns and growth opportunities. Compared to traditional bonds, convertible bonds provide bondholders with the option to convert bonds into stocks, offering stable income and potential returns from stock investments, possessing the ability to "attack and defend." Generally, issuers of convertible bonds are smaller companies in growth stages, with the expectation of increased stock market returns in anticipation of an interest rate cut in the second half of the year by the Federal Reserve, making convertible bonds relatively attractive after risk adjustment. ILS may be unfamiliar to retail investors. This asset category comes in various forms, with "catastrophe bonds" being a common form that is almost unrelated to traditional asset classes, with returns based on factors such as the frequency and severity of natural disasters. As the returns of ILS do not fluctuate with interest rates, they are not impacted by economic cycles, serving as a hedge tool against global inflation and interest rate changes, enabling investors to effectively diversify portfolio risks. It is worth noting that retail investors generally cannot directly invest in ILS, but can do so through purchasing related fund products. Optimistic about high-tech and AI-related stocks, preference for Japanese and European investment-grade bonds In considering alternative investments, investors should not overlook the importance of appropriately allocating traditional asset classes amidst a macroeconomic environment filled with uncertainties. For example, stock investments help capture capital growth potential, while bond investments offer stable income. In terms of stocks, there is optimism for the long-term growth potential of the high-tech and artificial intelligence sectors, with a broad scope of involvement beyond the semiconductor industry, including other industries such as networking and cybersecurity companies that have structural growth potential. In terms of geographical allocation related to stock markets, there is a preference for Japanese stocks at present. In recent years, the local exchange has implemented a series of reform measures aimed at enhancing governance standards for Japanese companies, including encouraging companies to engage in share buybacks and focus on organic growth, improving the quality of companies and attracting fund inflows. Additionally, there is an optimistic view on the stock markets of the United States, China, Taiwan, and South Korea. In terms of bonds, given the significant narrowing of the interest rate spread for investment-grade bonds denominated in USD, there is a relative preference for investment-grade bonds denominated in Euros.