The case for ‘mid-risk’ assets in a ‘lower for longer’ interest rate world
Summary
In the prevailing ‘lower for longer’ interest rate environment, investors have started to reconsider the risk reward trade-off that has historically been relied upon to bolster returns. It is our contention that ‘mid-risk’
assets (unlisted infrastructure equity and debt, unlisted property) will become relatively more attractive to institutional investors in this environment as they provide much needed diversification, along with solid expected returns that are
less correlated and less volatile than traditional listed assets.
The desire to de-risk is a key reason why we view ‘mid-risk’ asset classes as more attractive in the current environment.
Dr Alex Joiner, Chief Economist
This desire to de-risk is a key reason why we view ‘mid-risk’ asset classes as more attractive in the current environment. Increased allocation to mid-risk asset classes helps investors achieve a more acceptable level of portfolio
risk while still offering solid returns.
About the author
Chief Economist
Alex Joiner, PhD
Joined in 2016
Alex Joiner is Chief Economist at IFM Investors. He is responsible for the firm’s economic, financial market and geopolitical risk analysis that is key in IFM’s investment process. In this capacity he engages with IFM’s domestic and global clients on macro-investment trends and themes. He is a frequent commentator on economic and markets via traditional and social media and regularly speaks at public forums and conferences. He has over two decades of professional experience in economic and markets and prior to joining IFM was the Chief Economist at Bank of America Merrill Lynch (Australian & New Zealand) after being a senior economist at ANZ Bank. He holds a First Class honours degree in Economics and a PhD in Econometrics from Monash University. Alex is also committee member of the Australian Business Economists.
About the author
Economist
Frans van den Bogaerde, CFA
Joined in 2019
Frans supports the Chief Economist with the firm’s economic, financial market, and policy analysis and forecasting. He holds a Bachelor of Commerce (Finance & Economics) with Honours in Finance (First Class) from the University of Melbourne. Prior to joining IFM Investors Frans was undertaking his Honours degree and was a researcher with the Brain Mind and Markets Lab at the University of Melbourne.