hese days, a single tweet can change market direction and momentum. For investors navigating this market, it isn’t so much that the risks are challenging; rather, it is the accelerated pace at which risks move from being peripheral threats to adversely impacting portfolios. Investors should consider the impact of heightened risk velocity, and the trends causing it, in their allocation.
Seeking to maximize income per-unit of risk with a dynamic, multi-asset multi-manager solution. The theme of late-cycle volatility, spurred by geopolitical tensions and slowing global growth, has been well documented. Low global interest rates continue to present challenges to meet income needs and control risk.
For investors navigating current market conditions—an environment where a single tweet can change the market direction and momentum—it is not just the risks themselves that are challenging but also the elevated pace at which risks can move from peripheral threats to portfolio impacts. We call this “risk velocity.” This paper explores the primary drivers for this phenomenon and potential asset allocation implications.
A quarterly look at how macro events are driving relative value around the globe.
In the first week that Boris Johnson became Prime Minister of the United Kingdom, the Pound Sterling fell by 3.0% against the U.S. Dollar and the odds of a messy no-deal Brexit rose sharply.