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85% of bond returns explained by starting yields: an issue for multi-asset

85% of bond returns explained by starting yields: an issue for multi-asset

Multi-asset managers offer propositions such as ‘equity returns with two thirds of the volatility’. Bonds form a significant part of their diversifying non-equity holdings. Now starting yields are low. 10 year US Treasuries , 10 year gilts and global aggregate ETFs (bonds roughly evenly weighted from AAA to BBB) yield 2.3%, 1.1% and 2% respectively. With these as starting yields fund firms cannot expect a repeat of recent returns. So, to achieve higher returns more firms may be looking to support derivatives for relative value bond trades.

The first item on the 17th May Multi-asset Forum agenda is ‘New Product Development: building in simplicity or complexity’. To register for the Forum or discuss your issues with multi-asset investing please call Richard Phillipson or Amanda Irwin on 020 7933 9912.
Source Morningstar: http://www.morningstar.co.uk/uk/news/158239/what-return-can-bond-investors-expect-over-the-next-10-years.aspx?ut=6 

 

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Over ten years absolute return funds returned 32% while money markets gave

Over ten years absolute return funds returned 32% while money markets gave

Over the last ten years Absolute Return funds have returned 32% while the 20 – 60% and the 60 – 85% equity Mixed Asset Pension funds have returned 52% and 64% respectively. Under MiFID investment managers and advisers are both responsible for the suitability of products. The FCA is running a thematic review of absolute return funds.

At the Intelligence Multi-asset Forum on 17th May one of our topics is new product development, suitability and the role of different sorts of multi-asset funds in long term saving and retirement spending. To register for the Forum please click here. If you would like to contribute your thoughts for the Intelligence paper on issues such as NPD, acceptable drawdown, systems, risk, cost of OTCs in managing multi-asset portfolios please call Richard Phillipson on 020 7933 9912.

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