Optimizing Global Asset Allocation

Investors often face the challenge of deciding how to allocate assets across different global markets. Assume an investor holds a diversified portfolio containing equities, fixed income, and commodities, with exposure to North America, Europe, and emerging markets. In recent times, geopolitical tensions have increased in parts of Europe, while interest rates in North America have started to rise. The investor is re-evaluating their global asset allocation strategy.

The investor notices that historical data suggests emerging markets have provided higher returns than developed markets over long time horizons but with greater volatility. Considering the current economic landscape, recent market behavior, and risk-adjusted return expectations, which allocation strategy should the investor primarily focus on optimizing in the next 12 months?