The head of macro and equities investment at M&G said the investment house’s multi-asset team would be considering market “surprise” at low inflation for the forseeable future when making fund allocation choices.
He said this has resulted in picking longer-dated government bonds and “attractively valued equity markets” in the West for M&G’s multi-asset portfolios.
Mr Fishwick said: “There remains a considerable amount of ‘excess capacity’ in developed market economies. If producers increase supply, we may see economic growth, but crucially, we may also see downward pressure on prices.
“As such, we think growth may push inflation even lower. This may mean we probably will not need to fear inflation for some time to come, which could surprise a lot of people.”
