The environment of continuing monetary accommodation — necessary to support activity and boost inflation — may lead to a continued search for yield where there is too much money chasing too
few yielding assets, pushing investors beyond their traditional habitats.
Not exact matches
In a day and age in which regular
asset classes that commercial portfolio managers normally consider have become overwhelmingly bloated in price as a consequence of the persistent and extended cheap money policy of global Central Bankers, an investment strategy of concentration in
few select still undervalued
assets versus diversification is likely the only strategy that will work moving forward in returning significant
yields.
But in the last
few episodes of sharp stock market drops, bonds went up (US government bonds are a safe haven
asset and appreciate in crisis periods) so the only thing better than 3 months worth of expenses in a money market fund is having 3 + x months worth of expenses in the bond portfolio due to higher bond
yields and negative correlation between bonds and stocks.
The downgrade comes after a rally in risk
assets over the past
few weeks driven by the U.K.'s vote to leave the European Union on June 23 and the search for
yield amid expectations of easing.
The Federal Reserve is raising interest rates and unwinding its balance sheet, European Central Bank officials are tapering QE and the Bank of Japan is buying
fewer assets through its «
yield curve control» programme.
The case for high
yield rests largely on the fact that it remains one of the
few asset classes left that can offer a greater than 5 %
yield.
Indirectly, I learned this after several years of sitting next to the high
yield manager at Dwight
Asset Management (a very good firm that
few know about).
Very
few fixed income
assets are cheap, even if they should be, and investors» appetite for
yield continues to drive liquidity premiums lower.
Strategic Total Return continues to carry a duration of about 3 years (meaning that a 100 basis point move in bond
yields would be expected to impact the Fund by about 3 % on the basis of bond price fluctuations), with about 10 % of
assets in precious metals shares, and a
few percent of
assets in utility shares.
Among various types of income ETPs listed in the U.S., high - dividend equity ETPs recorded the highest five - year absolute and risk - adjusted return as of Aug. 31, 2017, although they had lower
yield than a
few other income
asset classes.
The error that the «earlies» made, and I knew quite a
few of them, was not recognizing how much debt could be crammed into the financial economy in order to juice returns on fixed income
assets with
yields lower than likely default losses.
Purpose built student accommodation is the UK's highest
yielding property
asset and has seen total investment in the sector consistently increase over the past
few years.