JPMorgan Warns Investors To Be 'Cautious About Chasing Yield'
Stephen Parker, head of JPMorgan's Thematic Equity Solutions, told CNBC on Friday that investors shouldn't be chasing yield in non-traditional asset classes.
Parker said investors have been "pilling in" to asset classes, which are perceived to be "safe havens." These include minimum volatility ETFs that offer exposure to utilities, consumer staples and other sectors that offer a "more attractive yield."
However, sectors such as utilities are no longer trading at a discount; rather, they are trading at a premium to the market.
"When you think about safety, safety is a reflection not just of the fundamentals but also of the price you are paying," he expanded. "We are telling clients to be cautious about chasing yields at this point."
Despite his cautious tone, he added that one of the "really positive" themes of the market year-to-date is that many of these safe sectors have outperformed the broader market. However, investors are indeed becoming "nervous" about the current price to buy these supposed safe haven investments.
Parker continued that in order for stocks to continue moving forward there needs to be better earnings and economic growth along with a higher inflation rate. His personal expectation is for growth to be "modest" and overall "positive."
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email email@example.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.