Industry Analysis

Risk on – risk off: how managers are responding to the new paradigm


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