Fidelity Investments says most investors are actively looking at dividend-producing stocks and corporate bonds for higher yields in today’s low interest rate environment.
The poll of about 1,200 clients with investable assets of about $250,000 and up was taken during a webcast—Fidelity Viewpoints Forum: Investing for Income—held in Boston on June 13 and released Thursday.
For the next six months, 54% of respondents are bullish about dividend-producing stocks. Fifteen percent are enthusiastic about investment-grade corporate bonds.
As for fixed-income investments, which had returns of about 7% in the last 12 months, only 18% think they can achieve or beat those results over the next 12 months. Some 32% believe their fixed-income returns will drop below 4%, while another 32% expect returns of 4% to 6%.
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“This group of high-net-worth investors are realists about this low-interest rate environment, but are not resigned to accepting low returns,” said John Sweeney, executive vice president of Fidelity Planning and Advisory Services, in a press release. “They’re willing to look to alternative products to find yield, but we encourage them not to stretch too far and lose sight of their underlying investment strategy and encounter unnecessary risk.”
Many investors, 44%, say they would put their next investing dollar into U.S. stocks, while 16% would put it into investment-grade corporate bonds, 9% high-yield bonds and 9% “under the mattress.”
Fidelity’s forum included discussions with five portfolio managers about the U.S. economy, opportunities in emerging markets and the investment universe.