Welcome!

News Feed Item

Pyramis Global Advisors Survey Reveals Surging Demand for Global Fixed-Income Strategies Amid Historically Low Yields

Home Market Bias on the Wane

Search for Yield Fueling Interest in Emerging Market Debt Strategies

SMITHFIELD, RHODE ISLAND and HONG KONG, PRC, Dec. 6, 2012 /CNW/ - Forty-three percent of institutional investors worldwide will likely increase exposure to global bond strategies in the coming years, according to a Pyramis Global Advisors® survey of pension schemes and other institutions from Europe, Asia and North America. These respondents oversee more than USD$5 trillion in assets.

Yields in many developed markets are extremely low, causing institutional investors from Europe to Asia to look beyond their home markets for fixed-income strategies that can deliver higher yields. In Europe, 38% of investors surveyed said they will likely increase allocations to non-domestic fixed-income strategies. The trend is even more pronounced in Asia, with 54% of investors indicating plans to increase exposure to non-domestic fixed-income strategies.

"With historically low yields in many safe haven bond markets and increased credit risk in a number of European countries, it is not surprising that many institutional investors are beginning to look beyond their borders," said Charlie Morrison, president of Fixed Income.

Growing Demand for Emerging Market Debt

Globally, 24% of investors surveyed said they will increase allocations to emerging market debt (EMD) over the next few years.

  • 37% of Asian institutional investors plan to increase allocations to hard currency EMD while 33% will likely increase exposure to local currency EMD
  • 47% of European institutional investors plan to increase allocations to local currency EMD, while 36% will likely increase exposure to hard currency EMD
  • 11% of U.S. institutional investors plan to increase allocations to local currency EMD while 13% will likely increase exposure to hard currency EMD
  • 15% of Canadian investors will likely increase exposure to EMD.

"The trends for emerging market debt remain positive," said Tom Hense, chief investment officer of the High Income division. "Attractive yields and improving credit fundamentals are fueling investor demand in these markets."

Currency and Derivatives Policies Evolving

The 2012 survey also indicated changing attitudes toward currency hedging. Traditionally seen as a way to hedge risk, currency hedging is now seen by many investors as a potential source of alpha as well. This trend is most apparent in Asia, where 47%of investors surveyed view currency as both an added risk to the portfolio and a potential source of alpha. This view was also held by 30% of the investors surveyed in Europe, followed by 24% of the respondents in Canada and 21% of the survey participants in the U.S.

The use of derivatives, which fell out of favor after the financial crisis in 2008, is once again on the rise. Sixty-four percent of all investors surveyed allow their managers to use derivatives. Of those surveyed, 47% use derivatives for downside protection, 43% use them to tactically adjust beta exposure and 42% use them to lengthen duration.

About the survey

Pyramis Global Advisors conducted a survey of institutional investors during June and July 2012, including 632 investors in 16 countries (193 U.S. corporate pension plans, 109 U.S. government pension plans, 92 Canadian pension plans, 149 European and 89 Asian institutions, including pensions, insurance companies and financial institutions). Assets under management represented by respondents totaled more than $5 trillion USD. The surveys were executed in association with Asset International, Inc., in the U.S., the Canadian Institutional Investment Network in Canada, and the Financial Times in Europe and Asia. Institutional executives responded to an online questionnaire or telephone inquiry. A report on the survey is available at www.pyramis.com

About Pyramis Global Advisors

Pyramis Global Advisors, a Fidelity Investments company, delivers asset management products and services designed to meet the needs of institutional investors around the world. Pyramis is a multi-asset class manager with extensive experience managing investments for, and serving the needs of, some of the world's largest corporate and public defined benefit and defined contribution plans, endowments and foundations, insurance companies, and financial institutions. The firm offers traditional long-only and alternative equity, as well as fixed income and real estate debt and REIT investment strategies. As of September 30, 2012, assets under management totaled more than $190 billion USD. Headquartered in Smithfield, RI, USA, Pyramis offices are located in Boston, Toronto, Montreal, London and Hong Kong.

635512.1.0
© 2012 FMR LLC. All rights reserved.

SOURCE Pyramis Global Advisors

Image with caption: "Investors Planning To Increase Exposure To Emerging Market Debt In The Next 1-2 Years (CNW Group/Pyramis Global Advisors)". Image available at: http://photos.newswire.ca/images/download/20121206_C6727_PHOTO_EN_21625.jpg

Image with caption: "Investors Who View Currency As Both An Added Risk And A Potential Source Of Alpha In A Portfolio (CNW Group/Pyramis Global Advisors)". Image available at: http://photos.newswire.ca/images/download/20121206_C6727_PHOTO_EN_21626.jpg

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
"As we've gone out into the public cloud we've seen that over time we may have lost a few things - we've lost control, we've given up cost to a certain extent, and then security, flexibility," explained Steve Conner, VP of Sales at Cloudistics,in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, described how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launching ...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
"Since we launched LinuxONE we learned a lot from our customers. More than anything what they responded to were some very unique security capabilities that we have," explained Mark Figley, Director of LinuxONE Offerings at IBM, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.