Investors not worried by end of QE2

WarehouseA majority of wholesale investors believe current economic trends will continue once the US Federal Reserve ends the second round of quantitative easing, with no mass sell-off of risky assets. The results are from a survey of 120 of Schroders' intermediary clients from Europe, the Middle East and Latin America. If the participants are right, the end of central bank-induced liquidity will not scare investors into offloading unsafe holdings – a scenario which could lead to tumbling asset prices. The results support the prediction of Willem Sels, UK head of investment strategy at HSBC Private Bank, who says the end of QE2 will not cause asset prices to deflate. He claims the global economic cycle will continue to drive prices even once the Fed ends its programme. This cycle will be driven partly by demand from emerging markets for commodities. Overall, he believes risky assets will see “somewhat slower, but still positive returns” after the end of QE2. Sels notes that asset yields have become more negatively correlated with the US dollar since the financial crisis, but thinks the end of QE2 will begin to dissolve this correlation. He said this could provide “opportunities for relative value strategies for active managers and hedge funds”. ©2011 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.