'Bondification' of equities picks up speed as investors chase returns

Singapore

THE 'bondification' of equities is on the rise as risk-averse investors chase returns, says a Create-Research report commissioned by Principal Global Investors and its parent company Principal Financial Group.

"The revived interest in equities is being driven by a high wire act. Investors are recognising that future returns for most asset classes will be much lower than in the past but they are also conscious of missing what may be a once-in-a-generation bull market," said Amin Rajan, CEO of Create-Research and the author of the report. "The result will be a 'bondification' of equities, as investors chase stocks with good dividends, less debt, strong pricing power, free cash flow and a high return on equity."