However, incorporating potentially higher -
yielding asset classes into a portfolio without carefully considering the additional risks that these securities may pose could prove to be a costly mistake.
A potential surprise: A rally in risk assets prompted by investors shifting out of cash and low -
yielding assets in search of higher returns.
Fear drives investors away from higher -
yielding assets as they flock towards safer assets, such as gold.
It's important to remember that all higher -
yielding assets come with higher risks, but some of these risks appear more worth taking now.
It's important to remember that all higher -
yielding assets come with higher risks, but some of these risks appear more worth taking now.
USD JPY Tumbles as Return of Risk Aversion Rocks the Markets The USD JPY reversed its four day rally as traders sought safety in
lower yielding assets following an announcement by President Obama to curb trading at financial institutions.
If persistent zero interest rates and quantitative easing that were intended to lead investors to take more risk in pursuit of higher
yielding assets led to dampened volatility, we should expect greater financial market volatility in 2015 as the Fed pulls back from its zero rate policy.
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.
When compared to
other yield asset classes, including high yield bonds, Real Estate Investment Trusts (REITs) and even many illiquid yield investments, merger spreads may offer higher returns with much less duration risk.
As of June 10, 2016, there is USD 10.6 trillion in
negative yielding assets throughout the world — that's more than 15 % of global GDP.
A traditional static indexing approach leaves an investor overweight the riskiest assets at the riskiest times and underweight those low risk higher
yielding assets when their returns are likely to be highest.
With respect to global credit sectors, both investment grade and high
yield assets provide a negatively convex risk - adjusted return profile, given their highly compressed spreads, while still cheap implied volatility for equities offers attractive, and positively convex, positioning opportunities to express our bullish global economic fundamental view.
U.S. Equities Post Strong Gains on Renewed Interest in Higher
Yielding Assets Confidence that the Greek budget deficit problem may be improving helped to drive up demand for risky assets.
Distributing your money across different asset classes based on your financial profile will
yield your asset allocation, so the idea is to match the profile to the appropriate plan.
Since then, I try to focus on hard and / or
naturally yielding assets, while trying to stay independent from the long - term debasement of fiat currencies.
The waning supply of distressed assets is producing stiff competition among investors who are still hungry for the higher
yields these assets offer.
With rates at near zero in the United States, and negative in Japan and Europe, the differential is a powerful lure for carry trades, in which investors borrow at ultra-low rates in currencies such as yen or sterling and buy high -
yielding assets such as the kiwi.
Haldane's basic argument was that pensions in the UK are not exactly a great investment after years of low interest rates and
low yielding assets.
Banks «earned their way out of debt» by lending to global speculators who used the yen loans to convert into foreign currency and buy higher -
yielding assets abroad — capped by Icelandic government bonds paying 15 %, and pocketing the arbitrage difference.
If persistent zero interest rates and quantitative easing that were intended to lead investors to take more risk in pursuit of higher
yielding assets led to dampened volatility, we should expect greater financial market volatility in 2015 as the Fed pulls back from its zero rate policy.
The new offering will allow institutional investors to diversify into a high
yielding asset like bitcoin - especially if the equity markets respond negatively to increased odds of a Fed rate hike.
This notion may make sense at a basic level, but it simply misses the massive need for
yielding assets in the current investment landscape, and the dearth of available supply.
If you, like me, hold lots of dull, low -
yielding assets, you're probably tempted to flip the page.
We do believe that there are large institutional investors there who are looking very actively to put their money to work outside of Japan and to move into higher -
yielding assets.
Rate rises by a central bank traditionally boost a currency as it promotes investors to flock to a country with the anticipation of higher -
yielding assets.
«GE should have used its stock for acquisitions while writing off dead, weak or low -
yielding assets,» said Wright.
Should the Fed be more hawkish and raise rates in the next couple of meetings, both gold and the miners will likely underperform as investors position towards higher
yielding assets.
Incorporating potentially higher -
yielding asset classes into a portfolio without carefully considering the additional risks that these securities may pose could prove to be a costly mistake.
Although, you've got a lot of exposure to some high -
yield assets, like TAL, ARCP, DLR, ESV, and your P2P lending accounts which are providing the bulk of your income.
Accordingly, the change in central bank mentality provides reason to consider whether the supply / demand imbalance for
yielding assets that we have talked about for years now faces an existential threat.
Ample monetary stimulus fuelled investors» risk appetite and boosted a search for higher -
yielding assets.
Plunging oil prices were a major market and economic shock in 2015 and early 2016, causing broad market volatility while adding to the pain in emerging market (EM) and high
yield assets.
This is evident in a number of developments, including: increased demand for higher - risk assets; the increase in «carry trades» — a form of gearing where funds are borrowed short - term at low interest rates and invested in higher -
yielding assets, often in other countries; growth in alternative investment vehicles such as hedge funds; and growth in alternative investment strategies such as selling embedded options (see Box A).
It was also intended to frustrate holders of conservative, low -
yielding assets, pushing them to seek higher returns in riskier investments and thereby fund job - generating business activity — and it seems to be working.
The high -
yield asset class in both the U.S. and Europe have suffered outflows but the issues in each market are different, Gallo said.