Preserve capital and grind out alpha

PIMCO/alpha/beta/returns/

5 September 2016
| By Anonymous (not verified) |
image
image
expand image

Australians need to preserve their capital, grind out alpha, favour bottom-up strategies over beta and scour the world for diversity, as potential future corrections were on the horizon, according to fixed income fund manager, PIMCO.

Whether Australians were transitioning from family owned enterprises to a diversified portfolio, or were in decumulation phase, investors needed to generate sustainable income that supported their spending habits, amid low interest rates and high volatility, the firm said.

PIMCO's managing director and head of Asia Pacific, Eric Mogelof, said capital preservation should be investors' number one priority.

"Riding a wave of unstable betas — all correlated to central bank polies — is no longer a strategy for success," he said.

Low passive returns are insufficient for both retirees and high net worth investors. So, investors could boost their returns with active management, he said.

"Moreover our secular outlook cites several additional left tail events that could increase the potential for capital losses and write downs — populist shocks like the recent ‘Brexit' vote and political gridlocks are two examples."

Higher market volatility also created opportunity and careful portfolio construction helped investors buy into undervalued assets, he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 5 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND