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?...

1 month 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 ago

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

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS