Top misconceptions about UK schemes’ investment plans
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Our digital events platform has made it possible to collect timely data about UK schemes’ investment priorities and concerns. But what misconceptions were highlighted by the responses of 70+ trustees and consultants attending our events between April and July?
Concerns about property have not subsided
71% of attendees were worried about investing in property in July – a proportion which increased rapidly from April to May and then stabilised. Our research reveals that cashflow issues are growing in rental income, but the persistent contrast between the sentiment on real estate and infrastructure is surprising.
High yield may offer opportunity, but appetite is low
Pension scheme sentiment in high yield bonds has been volatile. But while this asset class has offered investment opportunities, UK schemes have not shown a preference for high yield over investment grade. In fact, mallowstreet data suggests that demand for listed credit overall is much lower than for private debt. EM debt is also low on pension funds’ radar.
Listed equities are not attracting much interest either
Concerns about large-cap equities have fluctuated, with 24% worried about the outlook for them in mid-July, following record valuations across markets. Growth equities shine a closer light on these developments – concern about them has doubled since April. Dividend yielding equities raise doubts, given the riskiness of the income they deliver. Value equities do not rank highly either.