The Research IP Fund Manager of the Year Awards virtual event for 2021 included some valuable insights from several fund managers. One of the questions posed to each shortlisted fund manager was – what is the key risk in financial markets that you are keeping an eye on most at the moment?
The most common answer from the majority of fund managers centred around inflation and actions by central banks.
View the specific responses here:
As former US Federal Reserve Governor, Kevin Warsh, alludes to in the following podcast with Hamish Douglass, markets are being polluted by central bank interventions. What are the future inflation indicators to keep an eye on? Are macroeconomic factors or microeconomic foundations more important?
Access the podcast here: Magellan – In The Know – The Inflation Spectre Looming in the Global Economy
“We live in an extraordinary time for the global economy. Despite supply chain and workforce issues, a commodities boom and rising energy costs, the US Federal Reserve and European Central bank are keeping low interest rates frozen.” But with the inflation spectre looming on the horizon, he goes on to say “the window of opportunity for central banks to act may already be closing.”
Head of Financials, Allan Pullen, gives some further context to the inflationary risks in the following podcast given the recent spate of volatility in early 2022: Magellan – In the Know – Prudence in Volatile Times
“We’ve done work here in the macro team on what triggers bigger draw downs in markets historically. And the number one trigger historically for market draw downs is central bank tightening. It’s clearly a period of elevated risk for markets, for asset valuations and for economic activity, so something we’ve got to have to continue to monitor really, really closely. And yes, we should be concerned.”
Access the full Qualitative Fund Research reports on the Magellan Global Fund and Magellan Infrastructure Fund here.
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