Talking Point  

Invest in equities and alternative assets for ideal retirement portfolio

Invest in equities and alternative assets for ideal retirement portfolio

Those who are 20 years away from retirement should invest in a combination of equities and alternative assets, the chief investment officer of Sun Global Investments has said. 

Sanjiv Shah said that given bond yields are extreme lows, “alternative assets are a good substitute”.

“Obviously bond yields, the 10-year UK gilts are priced at 0.67 per cent and many other bonds are priced off that.”

But he stressed that the decision to invest in alternative assets for retirement portfolios depends on whether pensions are professionally managed, or managed by people themselves. 

Mr Shah identified structured notes as an attractive alternative asset to invest in. 

“If you are managing your own self invested personal pension then it is quite difficult to invest in structured notes as the minimum investment requirement [is typically] £100,000-£200,000.”

He added that retail investors typically do not have those funds, and hence access to alternative assets. 

He highlighted how regulators are cracking down on how structured notes are distributed to retail investors. 

Mr Shah dismissed concerns that UK equities are coming under pressure because of Brexit. 

"For those who are 20 years away from retirement, equities are a good bet. While there are worries about Brexit, UK stocks are yielding [well above average]."

He added that while there may be concerns about companies like Centrica slashing dividends, overall FTSE100 stocks are doing well. 

saloni.sardana@ft.com