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Save Should Not Mean Sacrifice
Portfolio Manager Nick Maroutsos believes that capital preservation and attractive risk-adjusted returns are not mutually exclusive despite zero-interest rate policy across much of the developed world.
Key Takeaways
- ■ With policy rates expected toremain low over the midterm,cautious investors can feel likethey must sacrifice an acceptablereturn when allocating towardshorter-duration fixed income.
- ■ We expect real returns oncertificates of deposit andTreasury bills to remain negativeas central banks keep their wordin not increasing rates and theglobal economy’s exit from theCOVID-19 pandemic is moreuneven than anticipated.
- ■ Investors focused on capitalpreservation can still earn relativelyattractive yields on shorter-durationsecurities by expanding their horizonto include developed markets withhigher interest rates.Nick Maroutsos.