•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Matthias Knab, Opalesque:

Nearly nine out of 10 institutional investors (88%) have some degree of concern that inflation will erode the real value of bond yields over the next one to two years, according to new research by Managing Partners Group (MPG), the international asset management group. 57 institutional investors globally were interviewed, May 2018.

Half (50%) of all the respondents say they will increase their exposure to higher-yielding assets such as fixed income asset backed securities (ABS) because of their concerns about rising interest rates. This compares with 37% who said they would do so a year ago.

Latest data shows that annual inflation in the Euro area reached 2.0% in June, which was the highest rate since February 2017 and represented a rise on the 1.9% recorded for May. In the UK, inflation as measured by the Consumer Price Index was 2.4% in May.

Jeremy Leach, Chief Executive Officer at MPG, commented: "Inflation is creeping back into western economies and institutional investors will have to adjust their bond and equity portfolios to deal with the headwinds created by monetary policy normalisation and rising interest rates.

"In this scenario, fixed income Asset-Backed Securities (ABS) offer an attractive strategy, with yields high enough to counter rising inflation while being secured against real underlying assets, which is reassuring for investors. This flourishing sector also offers a range of yields and risk profiles to suit a wi......................

To view our full article Click here