07.12.2017

Low Volatility to Persist, BlackRock Says

Historically low volatility has been a persistent market theme for several years now, and it can be expected to continue, according to the world’s largest asset manager.

The low-volatility environment global markets are currently experiencing may last longer than expected, and as a result, investors should be less risk averse than they currently are, said Richard Turnill, managing director and global chief investment strategist for BlackRock, Pensions & Investments reported.

At BlackRock Investment Institute’s midyear global investment outlook on Tuesday, P&I reported Mr. Turnill told attendees that, with the current low-volatility regime possibly persisting for longer than many expect, institutional investors should be more willing to seek out riskier investments.

“We still see clients overallocated to core assets,” he added, which include U.S. equities. He noted that “safe haven” assets won’t get the returns that asset owners are seeking.

Conversely, investors are currently underallocated to international equities, emerging market equities and alternatives, and should be looking to invest more in those areas.

 

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