For fund distributors and professional investors only.
Economic inequality is one of the most pressing social and economic issues facing the world today: it negatively affects human lives, slows economic growth and destabilises social systems.
Several factors are driving this trend. Globalisation has hollowed out manufacturing industries in developed countries, and the rise of robotics, automation and AI threatens future jobs.
Fewer opportunities to work means income and wealth inequality will worsen.
The deregulation of financial markets has arguably helped those who have wealth to increase it – particularly since the 1980s. By contrast, the large number of people who cannot invest in risk assets have found themselves left increasingly behind.
In developed markets, a decreasing number of wealthy individuals are shouldering more of the tax burden while pressure increases on social services, with fewer people able to afford medical care, retirement savings or even basic living expenses. It can be worse in emerging markets, where few own their homes or have sufficient savings.
Inequality also breeds distrust. In today’s increasingly transparent world it is easier to perceive financial differences. This promotes populist policies and makes people more stressed, less healthy and more inclined to make risky financial decisions.
Though there is no easy fix, policymakers, companies and investors can help narrow the inequality gap in the following ways:
At AllianzGI, we constantly work towards applying the power of active management to real-world issues. We aim to add value beyond economic gain by aligning our interests with those of our clients and communities, while directing capital to promote future growth in a more sustainable and equitable way.