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‘Eurozone deflation biggest risk facing investors’ - Schroders

Thursday 16th October 2014

Last month’s Schroders Institutional Investor Conference – hosted by Neil Walton, head of the UK Business Development Group – allowed a range of industry members to discuss key issues, with some interesting results.....
What is the biggest macro risk facing investors today? 
An overwhelming majority of 41% felt that the biggest macro risk facing investors is deflation in the Eurozone. 25% believed the biggest risk to be a hard landing in China, 23% pointed to the troubles in Russia, sighting a breakdown in relationships between Russia and the West and 11% felt much higher inflation was the biggest risk. 
When do you think UK interest rates will rise? 
44% predicted an interest rate rise from the Bank of England in the second half of 2015, with 37% anticipating an earlier rate rise in the first half of 2015. 15% of attendees predicted a rise in 2016 with only 5% signalling a later rise. 
What is your investment horizon? 
61% said their investment horizon was five years and over, 32% stated between 3-5 years and only 7% had an investment horizon of 1-3 years.
Which of the following methods would you advocate to mitigate downside in an equity dominated investment portfolio?
63% of attendees said they would diversify across multiple asset classes, 19% would appoint an active manager with the ability to reduce volatility and drawdowns, 9% would purchase hard protection e.g. a put option, or a capital guarantee and 4% would invest in hedge funds. 
Do you consider ethical, responsible or sustainable options when making investment decisions? 
39% stated that they did not consider ethical, responsible or sustainable options when making investment decisions at present. A further 35% said they did take these factors into consideration and 26% responded: ‘I don’t know or partially’. 
Would you accept some underperformance for responsible investing? 
62% of attendees would accept some underperformance for responsible investing under some circumstances, with 32% stating they would not. 6% stated that they would always accept some underperformance for responsible investing. 

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Editorial Contact Details - Conor Shilling
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