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Ed Fishwick By Beverly Chandler, Opalesque London

Speaking at the European Capital Markets Institute’s event this summer, Ed Fishwick, Managing Director and Co-head of Risk Quantitative Analysis of BlackRock gave an overall picture of the asset management industry across Europe.

Fishwick said that European markets are worth roughly $16 trillion, more or less the same size as the US market ($16.215 trillion). "The composition of Europe’s portfolio is usually rather conservative, with investments mainly in fixed income and money markets" he said. "The landscape is highly diversified by country and the institutional segment counts on average for 60% of total client assets, while the retail segment is roughly 40%."

In this landscape, exchange-traded funds (ETFs) are becoming an important part of the industry, Fishwick said. "Major market trends are reshaping the asset management industry, among them the growing allocation to alternatives investments, the underfunding crisis facing pension plans and financial reforms."

In addition, Fishwick stressed the easily adoptable investment framework of traditional allocation strategies for an optimal portfolio, which assume that markets are fairly priced, risk aversion is constant over time and returns are normally distributed. "These assumptions are particularly tested during times of crisis and growing risks and they are further undermined by market uncertainties" he said.

At the time of speaking, Fishwick reported that volatil......................

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