Ord Minnett was pleased to be a contributor to a white paper discussing the outlook for fixed income in a low interest rate environment. The document, titled “Lower Rates for Longer – Fixed income investing in a low rate world”, discusses the key challenges and opportunities facing retail investors in an economic environment that is characterised by sporadic economic growth and very low rates of inflation.
The paper highlights a chronic under-representation of fixed income within the superannuation environment. Investors have instead opted for an asset allocation that consists of large weightings to cash and equities. With this in mind, the paper discusses the role that fixed income can play in meeting the income and lifestyle goals of investors, such as being able to plan the timing of income with greater certainty.
The paper seeks to improve the overall level of understanding of various fixed income markets, highlight the growing number of ways to participate in the asset class (including a much broader range of listed instruments), and introduces a range of approaches to introduce fixed income into an investment strategy.