Investeringsselskabet Pimco advarer mod money market funds. Pimco har forståelse for, at mange investorer har søgt ly i fondene, men det er blevet en dyr fornøjelse på grund af nul-renterne. Investorerne bør finde alternativer, omend det er mere risikofyldt, fordi lavrenterne er blevet et næsten vedvarende fænomen.
Today’s economic environment is one fraught with uncertainty, where being selective in risk taking will likely prove to be beneficial.
Focusing on the defense is important, in fact, we’ve had over $800 billion year to date and over $2 trillion the past three years into money market funds as investors have grown more defensive.
Although the Fed’s policy response – really, cutting rates as well as providing liquidity through its various programs – has resulted in money market funds really being a safe haven, the cost to investors is growing. Money market funds currently yield about 0%, just over, and as a result, it’s going to have a dramatic impact on savers for the foreseeable future.
Interest rates are expected to remain depressed for years versus the prior recovery periods that we’ve seen. In fact, when you compare 2012 through 2015, another 0% interest rate cycle, we see that the expectation for interest rates was actually going to be moving higher over the foreseeable future.
Today, we see the exact opposite with interest rates remaining at or below near zero for the foreseeable future. Truly, a secular phenomenon that we’re going to have to contend with.
It’s time for investors to be conscious of their cash. A broader opportunity set affords potential for additional yields beyond money market funds for a modest increase in risk.
Investors can do better than those immediate liquidity solutions if their time horizon is beyond a few weeks or even a few months by stepping out of those restrictive money market funds and capturing the premiums that exist today and will likely exist into the future.
At PIMCO, we aim to benefit from these higher yields and these structural premiums, at the same time focusing on downside protection and most of all, liquidity management and capital preservation.
So despite the zero rate environment that we’re seeing at this point in time, clients should be focused on opportunities which are diverse enough, high in quality, and most importantly, can actively adapt to the changing landscapes to help produce positive total returns over secular horizons.
