The case for ‘mid-risk’ assets in a ‘lower for longer’ interest rate world
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.
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.
Meet the authors
Alex Joiner
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.
Frans van den Bogaerde
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.
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