Man Group duo: 'Helicopter money' policies could spell 'trouble' for multi-asset funds

Method could have inflationary effect, managers warn

Mike Sheen
clock • 2 min read
The duo argue helicopter money would eradicate the negative correlation between equities and bonds that multi-asset funds rely on for returns
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The duo argue helicopter money would eradicate the negative correlation between equities and bonds that multi-asset funds rely on for returns

Multi-asset funds using the traditional 60/40 equities/bonds allocation model will be hit by losses across their portfolios in the "likely" event central banks move towards fiscal quantitative easing, according to managers of the Man DNA multi-asset fund Ben Funnell and Teun Draaisma.

Also known as "helicopter money", fiscal quantitative easing (QE) - as opposed to the form practiced by global central banks in the years since the Global Financial Crisis - puts money in the hands of the population in efforts to increase consumer spending, particularly in the case of low interest rates and weak growth. SocGen's Edwards: Corbyn will be seen as moderate in next downturn According to the managers, the approach - which they believe is "highly likely" to be employed in the US, UK and Europe in the next two years - would have an inflationary effect eradicating the negative...

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