High returns and predictable cash flow still lure investors

With a view of the wider investment arena, David Riley, chief investment strategist at Blue Bay Asset Management, says that the impact of Covid-19 has been mitigated largely thanks to the huge liquidity provided by central banks.

Riley, a speaker at today’s REALX.Global online conference, adds that governments’ responses, such as furlough schemes to protect employment and loans to support companies has also helped. These initiatives facilitated the rally across financial markets that occurred after the initial shock of Covid-19 in March, he tells Real Asset Media’s Richard Betts.

In the wider investment environment, investors remain cautious, favouring such assets as investment-grade corporate credit and US growth stocks. For some sectors – such as leisure, transport, hospitality and retail – the uncertainty remains and the value of assets has lagged and it is unclear how many such businesses and sectors will survive, Riley says.

The long-term shift to real assets, including property and infrastructure, continues as investors seek higher returns and predictable cash flows. But even in Germany, which handled the Covid-19 epidemic better than most, the slow return to work has affected property.

Click on the video to watch the full interview or listen via the podcast below.