But should savers who are more than five years away from retirement consider investing in riskier assets for higher returns, in light of inflation?
“Investing in what the market traditionally defines as higher risk assets, such as equities, at this stage of the cycle is in our opinion not the right strategy,” says Knacke.
“We continue to prefer uncorrelated alternative investments, which produce either inflation-linked cash flows, or an investment strategy that offers uncorrelated absolute returns, with a proven competitive advantage and tailwinds of late-cycle investing.
“Within an alternative framework, investors can also increase risk should it be appropriate. For example, they might want to consider a higher volatility managed futures proposition, or higher yielding infrastructure investments focused on renewables or digital infrastructure, as these areas offer attractive return profiles.”
Chloe Cheung is a senior features writer at FTAdviser
