Monday, 3 April 2017

Institutional investors have concerns over inflation eroding bond yields

Well, well ... / BUT(!!!) what percentage of institutional investors?!?! ... you may be wondering, dear reader(s). 'Ha!' Well, wonder no more, my friend(s)!

NEW RESEARCH SHOWS 98% OF INSTITUTIONAL INVESTORS FEAR INFLATION WILL ERODE REAL BOND YIELDS.

Christ! Steve, will you cut it out with the capitals, man?! It's far too early in the morning. 'Who's Steve, boss?' He's the PR guy, Voice. / Steve, mate, have mercy. Please!

Virtually all (98%) institutional investors globally have some degree of concern that inflation will reduce the real value of bond yields over the next 12 to 24 months, new research by Managing Partners Group (MPG), the international asset management group, has revealed.

That's better. Thanks, man!

In order to address these concerns, just over a third (37%) say they will increase their exposure to higher yielding assets such as fixed asset backed securities (ABSs), the research shows. Of those who plan to increase their exposure to fixed income ABSs, 58% say they will do so because of the high level of income they generate; 53% say it is because the vehicles are attractive on a risk-return basis; and 41% cite diversification benefits.

Fair enough. I suppose they know what they're doing. / Let's skip a bit. Why are there numbers in brackets? I've deleted them, but - 'Maybe they got the idea from you, boss. Your conceptual stuff.' My stuff makes sense though. 'Oh, okay.' Yeah.

The research also shows that 37% of institutional investors anticipate that fund managers will increasingly issue fixed income ABSs to raise their own assets under management, versus just 11% who disagree with this. The primary reason for this expectation, given by 47%, was that ABS issuance allows fund managers to raise money under different regulatory regimes. Other reasons given included that it is much easier to raise money through ABSs rather than market funds in a highly competitive market (41%); they give the ability to target different sectors of the investment community (29%); and because monies raised are held for fixed terms, this means that investments can be planned more effectively (29%) and liquidity managed more easily (18%).

All right. All right. / I'll skip the bit about their office in Malta. 'Eh? Whose office in Malta?!' These guys, the MPG guys. However, I think Jeremy Leach has something he needs to say. 'Who?!' Christ! Jeremy Leach! FFS!

Jeremy Leach, Chief Executive Officer at MPG, commented: "The securities market, and fixed income asset back securities in particular, are set for substantial growth in Europe in the next few years. Fixed income ABSs provide the higher yields needed to tackle inflation while being secured against real underlying assets, which investors find reassuring. Governments are also putting legislation in place to promote them because of the role they play as an alternative source of finance to banks, which is particularly helpful for SMEs." 

 
Thanks, Jeremy! 'Er ... he's still talking, boss.' Bloody hell!

"MPG's capital markets team has identified particular opportunities for mid-sized issues backed by SMEs and esoteric assets and there is significant interest from businesses in the burgeoning fintech sector looking to fund themselves beyond the traditional bank market."

Well, okay. Thanks, Jeremy! I really appreciate it. 'Boss.' Shit! Will he ever stop?!

"We will also see fund managers increasingly use them as a straightforward means of raising assets under management that are 'stickier' and therefore help them manage their investment strategies and liquidity much more easily."

Is that it now, son? Jeremy? Jeremy? 'He's gone.' Well, he's gone, dear reader(s). I should imagine he's exhausted after all that. / You have a lie down, Jeremy! You deserve it.

The things people do for finance ...