Negative interest rates top portfolio risk in Asia: study

More than 66% surveyed believe the world will not recover from the pandemic in 2021.

Negative interest rates are the most pressing concern for buyers in Asia, according to the 2021 Professional Fund Buyer Outlook by investment manager Natixis.

The study found that 58% of buyers in Asia ranks negative interest rates as the top portfolio risk for 2021. This is followed by volatility at 37% and threat of deflation at 33%.

Globally, buyers are more concerned about volatility (49%) in 2021 with a large number foreseeing higher levels of currency volatility (53%) whilst others are concerned about volatility in stocks (40%) and bonds (43%).

Despite concerns in some areas, the study found that 56% of buyers anticipate that the healthcare sector will outperform this year. This is followed by consumer discretionary (46%), information technology (44%), and financials (45%).

Natixis said professional buyers see challenges in store in 2021 as the global economy struggles to recover from COVID-19.

“But even as they see the potential for risk and volatility, they are also looking at opportunity. As a result they continue to adjust both their allocation strategy and product offering to better adapt to the pandemic market and new client needs. In the end, they are taking on these 'unprecedented' times with a clear, measured plan that will lay the groundwork for years to come,” the company added.