Sentiment in financial markets appears to be increasingly
rocked by political and economic events – resulting in
portfolio managers putting risk on and off the table in what is
seemingly a disconcerting see-saw fashion.
Not surprisingly, this well-documented "risk on/risk off"
phenomena seems to be changing the way that many managers are
running their funds.
One effect is a rotation between speculative and defensive
investments, according to Ian Heslop, head of quantitative
strategies for London-based Old Mutual Asset Management.
Heslop and his team run Old Mutual Global Equity Absolute
Return Fund, and he explains: "This year and last year
investors have been grappling with when to have risk on or risk
off the table.
"We look at the investor sentiment and decide the strategy
for our portfolio. Since the last quarter of last year, we have
been rotating between speculative and defensive
"We are not taking on market risk...