Crowded trade risks, while often unappreciated by investors, can be real and significant. They can be viewed as a byproduct of the immense proliferation of index and index-like products. While these products meet important investor needs, their predominance has led to market conditions that can greatly intensify selloffs-and could expose equity managers to greater than expected losses in the event of a market downturn.
Tina Byles Williams, CIO and CEO of FIS Group, has just published the latest Q1 2018 Market Outlook, which delves into predictions for the year ahead, from a more challenging environment for risk assets to geopolitical tensions on the horizon.
Growth accelerated in Q3, with inflation quiescent in most countries; perpetuating the “Goldilocks” conditions that have generally favored risk assets since early 2009. Global equity markets continued their gallop in Q3, with the MSCI ACWI and the S&P 500 reaching all-time highs.
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Global equities rally supported by strengthening macroeconomic data.
Frontier markets were mixed in 2016, with most of the Middle East and Africa lagging the rest of the universe and a few markets surging ahead 30-40% on the year.