UK - Equities will fare better than bonds in the current global economic climate, Standard Life Investments predicts.
It states that the net effect of the current fiscal situation on leading economies is for a shift from a nominal surplus of around 0.3% of GDP in 2000 to a deficit of 2.2% of GDP by 2003.
This deficit will provide a fiscal stimulus that will provide a boost for equities ahead of bonds as a sustained upturn in the global business cycle occurs.
Head of global strategy Andrew Milligan said: “Such a sizeable fiscal stimulus - building on already very successful monetary decisions - will have an impact on bonds markets, as seen in the shape of the yield curve.”
He added that yields will rise on bonds due to greater competition between gilts and corporate bonds as governments increase borrowing. But in the US and UK the effect of this is likely to be tempered by pension funds switching from equities into bonds and thus creating greater demand.
By Paul Sanderson
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.