Negative Rates Warrant Investor Strategy Shift: Aviva’s Munro

The video discusses the challenges of investing in a world with negative yielding bonds, particularly for those with financial obligations like pension liabilities. It highlights the shift from defined benefit to defined contribution pensions, emphasizing the need for income-producing assets like equities and private assets. The video also speculates on future changes in bond markets and the role of central banks in managing long-term interest rates.

What is a primary reason investors are compelled to buy bonds in a negative yielding environment?

• To diversify their portfolio

• To hedge against liabilities

• To maximize short-term profits

• To avoid taxes

How have pension plans evolved in recent years according to the video?

• From defined contribution to defined benefit

• From defined benefit to defined contribution

• From private to public management

• From fixed to variable interest rates

What is a suggested alternative to negative yielding bonds for generating income?

• Cryptocurrencies

• Real estate

• Commodities

• Equities and private assets

What challenge might central banks face in controlling the bond market?

• Decreasing unemployment rates

• Increasing inflation rates

• Controlling long-term bond yields

• Managing short-term interest rates

Why might there be a reduced need for long-term bonds in the future?

• As a result of technological advancements

• Owing to higher interest rates

• Because of the rise of modern savings products

• Due to increased government regulations