Santander switches focus to the long run in 2024

Santander Wealth Administration & Insurance coverage, which holds the agency’s non-public banking, asset administration, and insurance coverage companies, believes that buyers ought to contemplate methods past the brief time period in 2024 following will increase to rates of interest

This technique was said in Santander’s Market Outlook 2024, Extending the Funding Horizon.

What are the alternatives in accordance with Santander in 2024?

As well as, Santander reveals quite a few choices which will symbolize engaging alternatives in 2024. These embody growing length in sovereign bonds and stepping up publicity to funding grade company bonds.

Moreover, Santander believes that 2024 is the proper time to construct a diversified portfolio because of the excessive yields in each rate-sensitive belongings (authorities bonds) and cyclically delicate belongings (company bonds and equities).

Victor Matarranz, world head of Santander Wealth Administration & Insurance coverage, mentioned: “Although economists love to provide very “mathematical” guidelines for the efficiency of macroeconomic variables, the very fact is that the post-pandemic economic system is departing from patterns noticed up to now. Particularly, the quickest rate of interest improve in a long time is simply slowly moderating development and inflation, elevating doubts in regards to the present macro dynamic.

“Sir John Templeton mentioned that “the 4 most harmful phrases in investing are ‘this time it’s totally different.’” So, to keep away from that error, we’ll say that “this time it’s taking longer.” On that foundation, our central state of affairs for 2024 is for financial development to decelerate (whereas avoiding a serious world recession); inflation to ease (however stay excessive) and rates of interest to begin falling (progressively).

“What to do on this surroundings? The dearth of visibility to this point on the tip of the rate of interest climbing cycle, coupled with a brand new episode of geopolitical danger within the Center East, has led buyers to give attention to short-term funding options, as these have been the primary beneficiaries of the rise in rates of interest.

“Nonetheless, we imagine it’s vital to mix this method with methods that allow us to increase these returns over an extended interval.”

For extra refined buyers, Santander Wealth Administration & Insurance coverage factors in the direction of non-public markets, that are outperforming and may be accessed by means of a rising vary of other funding options corresponding to non-public fairness, infrastructure, non-public debt, and enterprise capital.

Matarranz continued: “Outdoors authorities bonds and cash markets, there are different belongings with average credit score danger and buying and selling at cheap valuations that symbolize engaging funding alternatives, corresponding to funding grade company bonds. This makes it doable to assemble balanced funding portfolios with a greater risk-return profile than in recent times.”

Join our every day information round-up!

Give your online business an edge with our main trade insights.