Market participant behavior has shifted as a result of the “lower for longer” interest rate environment. Not only has the need to generate income from equity allocations become more important, but the increased frequency of both market volatility and large capital drawdowns witnessed since the financial crisis, has shifted preferences towards investment strategies with better downside capture. As future equity market returns are expected in the mid- to high-single digits, and investment strategy that seeks to produce dividend income, while offering better downside capture potential and lower volatility, could be a suitable option in the current environment.
