With volatility and inflation continuing to be AWOL, we wondered if there is any connection between the two. Why have both of these factors remained at historical lows for so long – where have they gone, and did they go together?

"In an idealized world, we would look to construct portfolios that gave us a pure expression of our views on each of the main investment factors," says Lingard. "By doing this, we could construct portfolios with better diversification and a higher probability of producing an outcome that meets investors’ specific needs. We could, for example, use option positions to gain long exposure to the volatility factor or potentially create asymmetric outcomes."

Stephen Lingard is senior multi-asset fund professional directly responsible for managing over C$10 billion in AUM across multiple strategies in Canada and offshore for Franklin Templeton Multi-Asset Solutions.

He has a diverse skill set in research, strategy, asset allocation, portfolio construction and risk management as well as extensive experience with retail and institutional clients globally. He is also a regular contributor to financial media in Canada and Asia.