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Komfie Manalo, Opalesque Asia: The volatile and uncertain market, particularly in an environment of zero inflation and risk of deflation, will make a six percent and seven percent yield to be the exception moving forward, said Ian Hamilton, Founder & Group Chief Executive Officer of IDS Fund Service during the latest Opalesque Zurich Roundtable.
Hamilton said that people still too often talk about levels of 6%, however, when the markets are confronted with a zero inflation scenario and fear of deflation, the focus of investors should realistically be capital preservation instead of trying to get six percent and seven percent gains.
He commented, "I think in the so-called institutionalization of hedge funds with pension funds coming in as investors, they are looking to have their capital preserved. They would love to get nice returns above that, but I think we’ve got to be realistic about expectations and benchmarks, et cetera, and 2% and 3% returns in the low-inflationary or zero-inflationary climate is fantastic. You just have to look at pre-inflation eras as well. And this is an obsession I find here in Europe, and I can't understand why you've got to have positive inflation all the time. All that does is destroy savings."
Rudolf Bohli, who is running a long/short European equity hedge fund with ...................... To view our full article Click here
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