UK - Schemes should move money out of "unexciting" government bonds and into other better performing fixed income assets, Schroder Investment Management claims.
The fund manager believes the current low interest rate environment will continue for the medium to long-term, which will lower returns on government debt.
Schroders said schemes should look at other fixed income assets, such as corporate bonds.
The firm also suggested that schemes put money into hedged foreign bonds, which would give them a broader set of investment opportunities without taking on unwanted currency risk.
Schroders also believes schemes should look at emerging market debt which, it said, had a wide range of higher- yielding bonds at attractive prices.
Schroders global head of fixed income Bob Michele said: “This is a good opportunity to focus on alternative fixed income investments.
“We have increased our exposure to both corporate bonds and mortgage-backed securities.
“We believe they are likely to gain from this low interest rate environment.”
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