Filippo Stefanini comments on Risk-off

Filippo Stefanini is head of Hedge Funds & Product Management at Eurizon Capital SGR, and a member of InvestmentEurope’s Editorial Board.

In January 2016 he commented on the following question:

Q.Have you had to review your fund selection (and/or asset allocation) positions in any particular way in light of the recent risk-off shift in global markets experienced at the start of 2016?

A. The very difficult start of the year on the financial markets has been caused probably by the selloff in the Chinese local market, by the devaluation of the yuan and by a sharp drop in the oil price. Quantitative strategies, volatility target funds, risk parity funds and systematic futures funds are exacerbating the price movements.

This is uncharted territory because it is the first time that one central bank is tightening monetary policy after the end of three QEs. Central banks can restore confidence of investors. Hopefully the Fed will be more gradual in raising rates, the Bank of Japan will do whatever it takes to target inflation and the ECB, at a certain point this year, could start QE2.

 

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