Why it’s time for a rethink on defensive assets
Angus Crennan argues that traditional defensive assets are no longer delivering the desired results. So, what is the future of the current “safe havens”?
It is certainly indicative of which part of the investment cycle we have reached when even PIMCO publishes a white paper* noting the real yield (ie, after inflation) on US government bonds is negative out to 20 years.
They also conclude that as long as central banks continue to print currency and maintain negative real interest rates, gold and other assets that store value should be considered.
So what does this say about the future for traditional “defensive” assets? (See Table 1)
{^image|(width)600|(height)163|(mouseoverheight)261|(url)http://media.cirrusmedia.com.au/Money_Media_Library/Print Images/121122/p21_MMNOV22_1.jpg"http://www.pimco.com/EN/Insights/Pages/GOLD-The-Simple-Facts.aspx" target="_blank">* PIMCO Viewpoint, October 2012
Angus Crennan is an investment specialist at Zurich.
Recommended for you
In this episode of Relative Return Unplugged, hosts Maja Garaca Djurdjevic and Keith Ford are joined by special guest Shane Oliver, chief economist at AMP, to break down what’s happening with the Trump trade and the broader global economy, and what it means for Australia.
In this episode, hosts Maja Garaca Djurdjevic and Keith Ford take a look at what’s making news in the investment world, from President-elect Donald Trump’s cabinet nominations to Cbus fronting up to a Senate inquiry.
In this new episode of The Manager Mix, host Laura Dew speaks with Claire Smith, head of private assets sales at Schroders, to discuss semi-liquid global private equity.
In this episode of Relative Return, host Laura Dew speaks with Eric Braz, MFS portfolio manager on the global small and mid-cap fund, the MFS Global New Discovery Strategy, to discuss the power of small and mid-cap investing in today’s global markets.
