Thought Leadership

Markets riskiest since quantitative easing say investors

29 August 2022

Nearly four in ten professional investors (38%) believe that the current level of risk in markets high with 23% stating ‘somewhat high’ and 15% very high, according to a survey carried out on behalf of Fulcrum Asset Management.¹

When asked to name a time when markets were last this risky², 41% of investors responded since quantitative easing was implemented, while others cited the 2007/8 Global Financial Crisis (18%), the 2016 China devaluation (15%) and the Dotcom bubble (13%).

When asked to consider their asset allocation for the next six months in light of market risks, commodities came out as the asset class most likely to be increased, closely followed by illiquid alternative investments and gold.

Fewer investors were planning decreases, but of those who were, nearly one third said they were eyeing up cuts to equities in light of the current market conditions.

Questioned more specifically on absolute return strategies, and given the outlook for markets, 72% said they would be more inclined to think about them.

Commenting on the survey’s findings, Nabeel Abdoula, Deputy CIO, Fulcrum Asset Management said: 

“There’s no doubt that investors are experiencing a more risky market environment in more traditional asset classes (i.e. equities and bonds), and sensing that, it’s no surprise that commodities, illiquid alternatives and gold are in favour as investors look to mitigate the current conditions.

Fulcrum’s Diversified Absolute Return strategy has been going since 2004 and has safely navigated many of the previous ‘crisis points’ highlighted by investors such as the dotcom bubble and the Global Financial Crisis. We therefore think it is a very sensible strategy for investors to hold something like this which is designed to help protect capital during times of great uncertainty.”

Fulcrum’s Diversified Absolute Return strategy is an all-weather multi-asset Investment strategy which follows an extremely robust and repeatable process, guided by economic theory and backed by empirical research. 

About the Author

  1. Findings are based on a survey from independent research consultancy, Censuswide, between 6th June – 10th June 2022 with a sample of 102 Professional Investors including 51 IFAs and 51 Institutional Investors / Consultants / Pension Fund Managers / Trustees. Censuswide is a member of ESOMAR – a global association and voice of the data, research and insights industry. Censuswide complies with the MRS code of conduct based on ESOMAR principles.
  2. The sample size represents a snapshot of those who were ‘favourable’ to absolute return, of 36 respondents which is lower than Censuswide’s usual minimum of 50 to ensure data resilience.
  3. The sample size represents a snapshot of those who were ‘not favourable’ to absolute return of 35 respondents, which is lower than Censuswide’s usual minimum of 50 to ensure data resilience.

This content is provided for informational purposes and is directed at professional clients as defined in Directive 2011/61/EU (AIFMD) and Directive 2014/65/EU (MiFID II) Annex II Section I or Section II or an investor with an equivalent status as defined by your local jurisdiction.  Fulcrum Asset Management LLP (“Fulcrum”) does not produce independent Investment Research and any content disseminated is not prepared in accordance with legal requirements designed to promote the independence of investment research and as such should be deemed as marketing communications.  This document is also considered to be a minor non-monetary (‘MNMB’) benefit under Directive 2014/65/EU on Markets in Financial Instruments Directive (‘MiFID II’) which transposed into UK domestic law under the Financial Services and Markets Act 2000 (as amended). Fulcrum defines MNMBs as documentation relating to a financial instrument or an investment service which is generic in nature and may be simultaneously made available to any investment firm wishing to receive it or to the general public. The following information may have been disseminated in conferences, seminars and other training events on the benefits and features of a specific financial instrument or an investment service provided by Fulcrum.Any views and opinions expressed are for informational and/or similarly educational purposes only and are a reflection of the author’s best judgment, based upon information available at the time obtained from sources believed to be reliable and providing information in good faith, but no responsibility is accepted for any errors or omissions. Charts and graphs provided herein are for illustrative purposes only. The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Some of the statements may be forward-looking statements or statements of future expectations based on the currently available information. Accordingly, such statements are subject to risks and uncertainties. For example, factors such as the development of macroeconomic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. In no case whatsoever will Fulcrum be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages. Reproduction of this material in whole or in part is strictly prohibited without prior written permission of Fulcrum Copyright © Fulcrum Asset Management LLP 2024. All rights reserved.

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