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Alternative Market Briefing

Low-interest interest rate environment necessitates rethink in investment management

Wednesday, November 12, 2014

Komfie Manalo, Opalesque Asia:

According to the Swiss Funds & Asset Management Association’s Alternative Investment Council (SFAMA - AIC), the low interest rate environment requires a investment management review.

In a media conference held on 11th November, SFAMA-AIC said that the traditional financial patterns are "increasingly becoming less effective against the prevailing capital market backdrop. Alternative investments offer a good means of enhancing portfolios."

Jérôme Teïletche, head of Cross Asset Solutions, managing c director and a member of the Executive Committee at Unigestion, said that yields "could remain doggedly low for much longer than most people expect. That said, a normalization of monetary policies would indicate an improvement in the macroeconomic situation, which would lead to better performance on average. Much depends on whether the central banks’ policies are seen as being credible. In light of these uncertainties, investors should adopt a diversified and risk-controlled asset allocation and remain vigilant, since things mostly turn out differently than you think, and fixed-income investments are currently dominating the risks in investment portfolios."

The SFMA-AIC added that government bonds are currently offering yields just above zero, the equity market is risky, and precious metals are not suited for the investment of entire portfolios. The earnings potential in the traditional bon......................

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