Low returns are here to stay: Roger Montgomery
Investors should be seeking to maximise their alpha through market neutral or long-short strategies, rather than chasing high yields over the coming years, an investment manager believes.
Montgomery Investment Management chief investment officer, Roger Montgomery, said that while investors needed to have the option of going to cash, he warned against being fully invested in the market, as global interest rates hamper returns.
"It's the right time to invest in market neutral strategies or long-short strategies, or investing [in a] long-only investment, with a manager that can hold cash," he said.
Montgomery encouraged investors to "go for core growth and high growth funds" that have an intrinsic value, delivering both capital and income growth... noting that "29 per cent of the sovereign debt markets" have negative interest rates, while recent reports have shown that US junk bonds were at record levels and defaults rates have doubled since 2014.
He added that quantitative easing measures adopted by central banks, aimed at pushing out corporate failures and raise consumption, had "artificially raised consumption".
Recommended for you
Economists feel it is likely that the RBA would have discussed the possibility of a rate hike at yesterday’s board meeting, pushing the possibility of rate cuts further down the road.
AMP has launched an alternative debt fund to provide investors with exposure to global private debt.
Some 44 per cent of top quartile bond funds in 2021 remained in the top quartile two years later, according to S&P Dow Jones research, far higher than their equity counterparts.
Perpetual has announced the outcome of a six-month strategic review and discussions with private equity giant KKR regarding its corporate trust and wealth management businesses.