What Institutional Investors Think About Interest Rates

Institutional investors, interest rates: Institutional investors currently do not anticipate the end of the so-called “easy money policy” to happen soon, according to a survey conducted by Allianz Global Investors. Around 42% of the surveyed decision makers from institutional investors in over 40 countries around the world consider that central banks will begin raising interest rates to their long-term historical averages no sooner than 2016, while 30% foresee a change in 2015, and 28% at an earlier point, Allianz GI said in a statement.

Ben Bernanke

At the same time, the opinions vary even more from a geographical point of view. For example, 56% of European institutional investors, which participated in the survey, consider that the rates will not go up in the next 2.5 years, while in North America and Japan higher rates are expected in 2015 with 48% of Japanese investors and 42% of North American subscribing to this point. Doug Forsyth, CIO of Fixed Income US at Allianz Global Investors had this to say:

 “Although the discussion about tapering that the US Federal Reserve introduced in June does not necessarily entail a regime switch towards rising rates, apparently there is a broadly shared feeling among investors that the economic cycle in the US is ahead the European which could possibly bear higher rates.”

According to Andreas Utermann, Global CIO at Allianz, investors analyze the monetary policy according to their particular regions, which explains the inconsistency in the answers of the surveyed. However, “given the paradigm shift in central banks’ monetary policies around the globe, it is more likely that they will be willingly rather ‘behind the curve’ than ‘ahead of the curve’ since they recognize how low rates are supporting indebted governments to grow out of their debt,” Utermann said.

This uncertainty could mean that investors will react very poorly to a sudden increase in rates, Utermann also warned.

Recommended Reading:

Hedge Fund Bond Strategies: The Trend in 2013 May Surprise You

Hedge Fund Week in Review: Activist Action

How Does Warren Buffett Make Money? This Study Attempts to Answer That Question

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!