Partner insight: 'Income is going to be harder to find and we're going to have to look harder for it'

Multi-asset investors are increasingly looking to alternative investments to provide defensiveness, says Henk-Jan Rikkerink

clock • 1 min read
Partner insight: 'Income is going to be harder to find and we're going to have to look harder for it'

With inflation levels high and interest rate increases on the horizon, investors are already considering their strategies.

Yet there is change coming over the longer term, too. Henk-Jan Rikkerink, Global Head of Solutions and Multi-Asset at Fidelity International, believes we are not only likely to see persistently higher levels of volatility over the next 10 years or so, but also lower returns.

"Despite some of the recent moves in markets, income is hard to find, it's going to be harder to find and we're going to have to look harder for it," he says. "At the same time, there's a greater need for income as more and more people head into retirement."

Rikkerink particularly highlights the need to evolve the defensive elements of these portfolios, adding more diverse building blocks and non-traditional assets.

"The notion that fixed income gives you defensiveness is under challenge," he says. "Whether it is alternative investment or private markets - the assets that go beyond simple equities and fixed income - you will need them to hit the client returns of the future."

Increasingly investors are looking to products such as commodities, gold and Chinese government bonds. For strategies that use private markets, greater attention is being paid to areas such as real estate and the use of private debt.

 

More on Economics

Partner insight: Out of the wilderness

Partner insight: Out of the wilderness

Solving the problem of inertia in cash gives opportunities to both advisers and their clients, say Flagstone's Claire Jones and Grovewood Wealth Management's Lynne Gadsden.

Lynne Gadsden @ Flagstone
clock 11 August 2022 • 1 min read
Without accounting for food and fuel costs, prices jumped by 5.9% through July, matching the previous reading.

US inflation cools to 8.5% in July

Slowdown due to lower fuel prices

clock 10 August 2022 • 3 min read
European-focused investment grade and high yield credit have highest inflows since April 2020.

Fixed income dominates ETF flows in July

Accounted for $32.5bn

clock 08 August 2022 • 2 min read
Trustpilot