Investment Insights | Market Commentary Active opportunity knocks II

What does the potential higher volatility mean for active investors?

20 Mar 2018

According to received market wisdom, with higher risk comes greater opportunity. Investment Insights explores what the potential for a higher volatility and dispersion regime may mean for active investors.

  • Broadening array of outcomes for key macroeconomic variables, gradual removal of monetary policy support suggest higher volatility regime is likely to persist across asset classes
  • We see the same drivers supporting and sustaining higher return dispersion within equity markets
  • Strong historical relationship between higher return dispersion and outperformance in actively managed equity mutual and equity hedge funds
  • Our view is that we are at the early stages of a multi-year market regime that is likely to offer high conviction active managers the opportunity to generate significant alpha

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