Jon Beckett comments on Risk-off

Jon Beckett is based in London and a member of InvestmentEurope’s Editorial Board. He is the author of New Fund Order, a book about the emerging need for a new approach to manufacturing, distributing and buying funds.

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. In many ways, how markets performed in Q4 was utterly predictable based on the weak summer. Capital losses and high yield bonds correlated, a run towards low returning asset classes. In truth investors have been looking for a reason to sell off since the summer. Whether China, oil or poor Fed guidance, you can blame lots of factors but really the media
did a great job of stoking up the Bears.

What surprised me was that some multiasset managers were badly positioned for what looked to be a clear trajectory. Absolute return managers who performed through Q4 will be more attractive than ever to buyers. I gauge my AR managers by stringing stress performance not by aggregated numbers.


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