Global market volatility frightens investors
Volatility in global markets has frightened investors according to research conducted by boutique international equity manager Certitude Global Investing.
The October release of the Certitude Global Investing Intentional Index (CGIII) found a five per cent decrease in October in demand for global investments from actively engaged investors, making it the lowest level of demand since February 2014.
Certitude has attributed this marked drop in confidence to market volatility the like of which has not been faced since 2008.
Certitude chief executive Craig Mowll commented, "There is no question that investors are feeling more concerned than usual about global markets and that this anxiety has translated itself into very volatile market conditions around the world."
Of the 515 investors surveyed by Certitude, 25 per cent of investors cited market volatility as the biggest barrier to investing overseas, an increase of 17 per cent since September 2014.
There was also a drop in investor preference for equities as international asset choice, with 81 per cent preferring shares for gaining global market exposure.
"This was 4% pts fewer than last month, no doubt a response to volatility in international markets," said Mowll.
Apprehension generated by market volatility has driven investors to alternative asset classes according to the survey,
Mowll noted, "What is worth noting however, is that at the same time that demand for equities dropped, demand for alternative asset classes, such as private equity funds, hedge funds, infrastructure and commodities all increased. This was clearly a case of investors looking to mitigate portfolio risk by choosing assets classes with low correlation to equity markets."
AUTHOR
Priya Prakash
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
