UK - Interest rate uncertainty is prompting schemes and other institutional investors to "neutralise" the economic sensitivity of their portfolios, State Street Global Markets claims.
It said that institutional investors – particularly in the US – were unwilling to take strong positions on which way interest rates would go and were buying both cyclical and defensive stocks.
Global head of equity Peter Sullivan said investors were selling consumer cyclicals and buying technology, banking and insurance sector stocks. Additionally, they were selling Asian equities and acquiring defensive stocks in the US.
“In the face of uncertainty about the pace of interest rate increases, institutional investors are neutralising the economic sensitivity of their portfolios.”
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