Deutsche Bank urges investors to seek alternatives to shares, bonds

The pillars on which investment portfolios have traditionally rested, such as equities and bonds, should be replaced by new asset classes following the devastating implosion of markets last year, the lead strategist for Asia-Pacific at Deutsche Bank Private Wealth Management says.

'This crisis really has the impact that people will go for alternative investments,' said Christian Nolting.

'People will start focusing on this and of course it's due to correlation, due to diversification.'

Mr Nolting expects alternative investments, such as currencies, property or pure commodity plays, to comprise more than half of a portfolio within three years, compared with a current share of about 10 per cent.

Capital markets were pulverised last year by the combination of a United States housing crisis and the collapse of the global financial system. Analysts believe the massive losses that investors incurred have challenged the traditional investment wisdom of accumulating equities for the long haul.

The benchmark Hang Seng Index dived 48.27 per cent last year to its lowest level since 2004. Mainland markets were even worse off, as the Shanghai Composite Index plummeted 65.39 per cent.