Schroders' Investment Strategy Unit claims that bonds are not a "safe haven" from market turbulence, and that equities will produce superior returns.
According to Schroders revised investment outlook, not only will equities produce superior returns to bonds, returns from cash could outstrip those from bonds within the next few months.
Additionally, Schroders thinks that due to low inflation, competitive currency depreciation could soon become a major policy instrument. If this is so, it would be a “major driver” of increased currency volatility, bringing it back to the forefront of strategy decisions.
Schroders also feels more positive on the US, due to the Federal Reserve cutting US interest rates. Against the backdrop of improved investor confidence, Schroders expects areas such as emerging markets and continental Europe to outperform. In contrast, the UK has a bias towards defensive sectors such as pharmaceuticals, and is likely to lag behind.
By Geoffrey Ho
Fixed-income ETFs are helping pension schemes tailor their fixed income exposure. Bryon Lake, Head of International ETFs at J.P. Morgan Asset Management, explains how.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
This week's top stories include an article on climate activists from Extinction Rebellion crashing the PLSA's local authority conference, and an in-depth piece on the Court of Appeal's ruling on the BIC UK Pension Scheme case.