There is a mismatch between inflation data and reality, as central banks readjust their targets in an attempt to create growth, said Pippa Malmgren, author and founder of DRPM Group.
Speaking at Pensions & Investments' WorldPensionSummit in The Hague, Netherlands, on Wednesday, Ms. Malmgren said the increasing price of protein foods is an indicator of inflation even though the message from central banks continues to be that inflation targets are yet to be met.
“We are feeling inflation even though there is no data suggesting it,” she said. “In Norway, the price of salmon is higher than a barrel of oil.”
Panelists speaking at the summit agreed that solutions are emerging in the real economy rather than in financial markets, and institutional investors need to begin to take advantage of these opportunities.
“We live in an on-demand world, where work is beginning to take an on-demand format so there is a need to start thinking about redistribution of income,” said Harry Smorenberg, founder of the conference.
Ms. Malmgren added that “the largest investors have limited opportunities to invest in the sector offering the biggest promise of growth, (namely) small enterprises.”
In a separate panel discussing opportunities in Asia, Richard Pan, head of QFII investment, portfolio manager, institutional equities at China Asset Management, said China's domestic equity market is set to benefit from the country's transition to a knowledge-based economy. “Chinese domestic equities are underowned with global investors only owning 2%, compared to 30% in Japan or South Korea,” he said.
Mr. Pan added that the ownership of Chinese domestic equities by non-Chinese investors is growing and is expected to reach 10% in the next decade.
He said future growth will come from the small and medium enterprises operating in domestic sectors such as health care, information technology, online shopping and aviation.