Many asset owners have shortened their strategic asset allocation horizon, often from three years to one year, according to a survey by MSCI.
Participants appear to have lost patience with their investments and are more likely to change their strategic asset allocation after a short period of time. They named market, counterparty and liquidity risks as their main concerns.
In its 2011 Global Asset Owners Survey: Back to the Future of Risk Management, MSCI found risk management has become both a high priority and a more formalized component of the overall investment process.
The number of surveyed firms using stress tests has almost tripled since 2009.
“The results of our survey clearly show a continued evolution through these uncertain market times with a greater focus on risk management and with more resources dedicated to measuring and managing risk,” says Frank Nielsen, executive director of research at MSCI. “The results reflect how risk management has become both a high priority and a more formalized component of the overall investment process for our clients.”
Last month MSCI surveyed 85 participants from 26 countries, representing roughly $5.5 trillion ($4.1 trillion) in assets under management. Typically they held the positions of chief investment officers, chief risk officers, portfolio managers, senior risk analysts and middle office heads.
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