Taking care over the types of investment selected has become increasingly important considering the difficult investment environment, BNY Mellon Asset Management has stated.
James Harries from the Newton branch of the company has offered his overview on the sector and explained that the outlook for the global economy needs to take into account the possible developments over the coming years.
He explained that authorities across the developed world have put in a raft of different measures in the hope they would enable them to combat the challenges their indebted economies are suffering, but the results of this is unlikely to be seen in the short term.
The risks current being seen across this area of the world were noted to be numerous at this time, with credit and counterparty and liquidity risks all assuming a significance which many investors rarely had to pay any attention to in the past.
As a result of all of these aspects, the current market is one in which investors may have to tread far more carefully than they have been used to in other times.
Mr Harries explained that in this market, the company is looking to focus on firms which it thinks will have durability and a relatively stable end demand.
"After a strong performance from defensive sectors last year, we wouldn't be surprised if there was a period where more cyclical sectors take up the running and the divergence closes between defensives and non-defensives," Mr Harries added.
BNY Mellon also recently highlighted how people who want to find a good quality investment in the current climate need to stay in active pursuit of a fund, as the best options are now much harder to come by.
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