Implications of low or negative rates for multi-asset investing
Interest rates globally continue to plumb multi-decade lows, or even multi-centennial lows in the case of Bank of England. In this article, we outline some key implications of negative interest rate policy and the ‘lower for longer’ rates regime. We may be about to enter a period where bonds and equities are highly correlated. In this scenario, the positive correlation could come to haunt multi-asset strategies. If sovereign bonds do not provide the safety buffer that they once did, how can we best position multi-asset portfolios to mitigate downside risk? We believe there are three key strategies to acheive this, as discussed in the following report: (VIEW LINK)
Nikko Asset Management is one of Asia’s largest asset managers, providing high-conviction, active fund management across a range of Equity, Fixed Income, Multi-Asset and Alternative strategies. In April 2021, Yarra Capital Management acquired...