Insurers looking for profits on their investment portfolios will be rewarded for taking risks in 2004, it was forecast.
Growing global economic recovery and rising corporate profits are major point ...
Insurers looking for profits on their investment portfolios will be rewarded for taking risks in 2004, it was forecast.
Growing global economic recovery and rising corporate profits are major pointers to opportunities for canny investors, said Madeline Forrester, head of insurance asset management at Threadneedle Investments.
She predicted "pretty dull" results from government bonds over the next 12 months, "returning at best no more than their interest payments".
Threadneedle is recommending its clients reduce slightly the neutral position of their portfolios, but give their investment managers scope to trade around to add value.
Forrester said the time had come to consider even non-investment grade bonds.
She said: "In the world of corporate bonds, falling default rates, rising global growth, better company news flow and the first indications that a number of `fallen angels' could be upgraded represent a compelling environment, we believe, for moving down the credit spectrum, possibly into non-investment grade issues.
"After a punishing time in 2001 and 2002, high yield has rebounded this year but still offers attractive returns compared to cash."
