Tue, Sep 23, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

ConvergeEx: Investors underestimate volatility potential

Friday, August 01, 2014

Bailey McCann, Opalesque New York:

Investment professionals say that investors are too complacent about the potential rise in volatility that could hit financial markets in the coming months according to new research from ConvergeEx Group. 71% of survey respondents expect volatility to climb from historically low levels by the end of September 2014, and even more (81%) expect a rise by the end of December 2014.

A majority of those surveyed identified U.S. Federal Reserve policy as the most likely driver of a near-term spike in volatility. Events in the Middle East came in second at 16% and Ukraine came in third at 14%. In line with those observations, respondents predict the VIX will be at 13.3 by the end of September 2014, and at 14.5 by the end of December 2014.

"We also have a clear picture of how record low volatility has hurt the sell side," says Tony Saliba, ConvergeEx Group executive managing director. "Two thirds of banks and brokers say the current environment has been bad or very bad for business."

An uptick in market volatility could actually be a blessing in disguise for some investors - particularly those with hedge fund allocations that have lagged behind in the low volatility environment. Still, investors are often unwilling to ride out volatility to reap those returns. Others who are not defensively positioned, may find volatility tough to take if they've been over reliant on the long only rally in recent quarters.

Survey respondent......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali