Below Zero: How low rates are reshaping the investment landscape

The report looks at how low interest rates across much of the developed world are becoming an entrenched norm. It examines the impact of low rates on portfolio allocation, the changing economic backdrop, and the risks and opportunities for investors. Fullerton’s Chief Investment Officer and investment subject matter experts also share their viewpoints on the opportunities that exist across Equities, Alternatives, Equities, Fixed Income and Multi-Asset amidst this low interest rate landscape.

Summary:

  • Negative interest rates and quantitative easing are the biggest monetary experiments of modern times. Abundant central bank liquidity has buoyed asset prices and generated above-average portfolio returns over the past decade.
  • This has significant implications on valuation metrics such as price to earnings multiples for stocks with different characteristics within the broad market. Stock selection will remain paramount in a low interest rate environment as economy-wide growth will not likely be sufficient to lift all boats, leading to a wider difference between stock market winners and losers.
  • A low interest rate environment also enhances the appeal of alternative assets, such as private debt, infrastructure, real estate and private equity, which typically require long-term commitments. The broadening sector can offer investors flexibility in risk-return profiles, as they look beyond traditional investments for returns.

For more insights, please access the full report here.


Ong Guat Cheng, Head of Fixed Income, shares where the opportunities lie for fixed income investors in an environment of low interest rates.



Fullerton’s strategist, Robert St. Clair discusses the structural impact of low interest rates on investors and capital markets, and how best to uncover the investment opportunities amidst the risks.



Our investment experts discuss the significant structural shifts that are occurring as a result of low interest rates and how investors can capture the right investment opportunities in this landscape.