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
Bachelor of Economics (Hons) (Latrobe University), PhD (Econometrics) (Monash University).
Alex is IFM Investors’ Chief Economist and has more than a decade of experience in the field. He is responsible for the firm’s economic, financial market and policy analysis and forecasting. Alex is also a member of the firm’s Investment Committee. Prior to joining IFM Investors, Alex was the Australian Chief Economist for Bank of America Merrill Lynch. In this role, Alex was responsible for providing economic insight and forecasts across asset classes and conveying these views to both domestic and global investors. Alex was also previously a Senior Economist at the ANZ Bank.
About the author
Economist
Frans van den Bogaerde
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.