Investment - Articles - Interest and long term yields to fall before rising


More than half of fund managers expect both UK base rates and long term gilt yields to fall to between 0% and -0.5% within the next 5 years, according to a new survey. XPS surveyed Investment Fund Managers with assets under management totalling more than £1.6 trillion.

 Long term yields – which reflect the markets expectation of future interest rates – have fallen by 1% over the last 2 years, which has caused considerable challenges to pension scheme funding. XPS’ survey illustrates that record low interest rates and yields will provide no protection from the further falls in interest rates that fund managers expect.
 
 Head of Liability Driven Investment at XPS Mark Minnis said: “The belief that yields can’t go lower has been defied by experience time and again. With record low interest rates and already negative short term government bond yields, there is no reason why longer term yields will continue to remain above zero. This is not a market for pension schemes to speculate in, schemes should look to hedge as far as practically achievable”
  

Back to Index


Similar News to this Story

PIC complete buyin with Royal Society of Chemistry Pension
Pension Insurance Corporation plc (“PIC”), has concluded an £83 million full buy-in with The Royal Society of Chemistry Pension Scheme (“Scheme”), sec
The impact of the tech correction on EM allocation
AI has been the dominant driver in markets this year. For Emerging Markets, this has played out in an extraordinary demand for those stocks that produ
FCA review to drive higher standards in growing MPS market
Daniel Nilsson, Senior Portfolio Manager at Isio Investment Management, comments on the FCA’s ongoing review of the Model Portfolio Service (MPS) mark

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.