News Digest: Investors shift to fixed income strategies seeking higher returns
October 10, 2022
Increased market volatility amidst a looming recession has intensified investor considerations of alternative sources of return, says a new research. This change impacts how traditional sectors are viewed and adds increased liquidity risks into the equation, thus disrupting some longstanding preferences for active approaches.
A survey by State Street Global Advisors, the asset management business of State Street Corporation, says respondents are specifically interested in increasing allocations in bank loans (51%) and inflation-linked bonds (42%) over the next 12 months.
A third of the investors (31%) chose to cut their traditional fixed income allocations in favor of alternatives over the past nine months while a further 29% plan to do so over the next 12 months. Investors (59%) are also gravitating towards new, data-driven approaches to fixed income via systematic strategies.