Principal Global Investors: We are seeing investors operate with more caution. Income and risk are more important than high returns. Goal-oriented investing is the major theme with investors today, said Barb McKenzie, senior executive director and chief operating officer of Principal Global Investors, according to Market Watch. This shift, a by-product of a sustained low rate environment, marks a fundamental change in investor attitudes rather than a short-term trend. This fundamental change in attitudes can be seen in the behavior of all four different investor groups: As markets continue to defy previously held investment logic, investors understandably remain cautious. This has led to an increased demand for strategies tailored to take account of investor concerns and minimize unrewarded risk exposure. The report notes that baby boomers are retreating from their previous risk-taking mode, and now favor a high probability of certainty over a low probability of high returns. We see this in their selection of actively-managed, income-producing funds, said McKenzie. Fewer and fewer investors are interested in tactically allocating through purely passive products today. Beta is unpredictable and investors crave predictability and income.
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