Low yield

Low yield

Low yields have presented a significant challenge to investors for a number of years. We see a moderate US-led reflation which is slow and expect inflation and interest rates to reach levels well below the average of past recovery peaks. While global growth is likely to pick up, yields are still at low or negative levels and we expect them to stay low in Europe and Japan in the foreseeable future.

In our view, there are three paths which could offer potential returns to investors, while endeavoring to avoid assets with low yields and possibly negative returns: 1) adding to higher yielding bond strategies; 2) within equities, a focus on unconstrained strategies; 3) increasing exposure to alternative asset classes.