Powered by momentummedia
nestegg logo
Powered by momentummedia
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Invest

Global growth to remain ‘frustratingly fragile’

  • February 25 2016
  • Share

Invest

Global growth to remain ‘frustratingly fragile’

By Miranda Brownlee
February 25 2016

Investor portfolios are expected to take a hit as returns for fixed income and equities are tipped to remain low over the long term, according to one senior economist.

global growth remain frustratingly fragile

Global growth to remain ‘frustratingly fragile’

author image
  • February 25 2016
  • Share

Investor portfolios are expected to take a hit as returns for fixed income and equities are tipped to remain low over the long term, according to one senior economist.

global growth remain frustratingly fragile

In many key economic regions, inflation and GDP growth is expected to remain subdued and below trend respectively, according to Hong-Kong based senior economist from asset manager Vanguard Qian Wang.

“That gives you a lower interest rate and if your cash rate is low, it means all the returns for the risky assets will be lower,” said Ms Wang.

For the global fixed income market, Ms Wang said Vanguard predicts a return between two to three per cent.

“We want to remind you that there are a lot of possibilities and there is still risk, but the median, the most likely scenario is the return for a global fixed income portfolio for the next few years will be two to three per cent, [so] lower than the historical average,” she said.

Advertisement
Advertisement

For the equity market, returns are expected to be around six to nine per cent, she said.

“So this seems to be our changing world, everything seems to be lower. But what is not changing is that higher returns always come with higher risk,” she said.

“The ultimate question for the investor in this environment is; in order to achieve a decent return target, similar to what you got before, are you willing to take on more risk?”

Global growth to remain ‘frustratingly fragile’
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.