SdR, Aurilia (JP Morgan AM): return to the old normal, exploit bonds in all their breadth

SdR Aurilia JP Morgan AM return to the old normal

(Finance) – “Lo The state of health of the asset management sector is goodalso because we must always remember that, above all in our country, the most important asset remains savings, so savings management becomes fundamental”. He told Finance Andrea Aurilia, Country Head for Italy of JP Morgan AMon the occasion of the thirteenth edition of the Salone del Risparmio, the reference event in the asset management sector, organized by Assogestioni.

“It is clear – he continued – that several things have happened in recent months, including at a financial level and perhaps the most striking dynamic has been the transition – as regards the bond markets – from the so-called new normali.e. a period of long low rates in which bonds rather than offering a risk-free return offered a risk-free return, to the old normaltherefore a situation in which bonds begin to do what they are traditionally designed to do and that is debt service”.

According to Aurilia, “after years of a new normality, in which savers were constantly forced to climb the bond curves in search of a little more yield – but also in the face of significant risks – today they find comfort in more traditional fixed income sectorssuch as government bonds and investment grade corporate bonds”.

“So what needs to be done is exploit the bond market in all its breadth and not to indulge in the so-called mental shortcuts that typically long-bias behavioral finance tells us about, which pushes investors to focus only on their own backyard and what they believe they know particularly well, i.e. government bonds”, he explained.

As far as Italy is concerned, “at a commercial level we are very much riding the theme of Back To The Block therefore a return to the traditional but always up-to-date bricks of diversification, the use of products – precisely bricks – which are used to build an effective asset allocation in the awareness, for example, that today, with this level of interest rates, start investing again for example in balanced solutions in the traditional sense – let’s say 50% stocks and 50% bonds – can be a really interesting choice because the increase in rates will favor a reduction in the correlation between stocks and bonds”.

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