Seven themes shaping financial markets and investments
By Kirsten Hastings, 19 May 16
The long term trend of easily securing healthy returns is coming to an end and investors now face the challenge of how
to generate reliable capital growth and income. Aviva Investors has identified seven drivers of long term investment returns. They can be seen by clicking through the following pages.
Calamities, such as the global financial crisis, have periodically struck financial markets throughout history; the tulip mania of the 1630s providing an early example.
Inevitably, these events precipitate a wave of new regulation that also often produces unintended and unwelcome consequences. The concern has always been that new rules are designed to address the excesses that caused a past crisis, rather than anticipate the next one.
The authorities have introduced a raft of new regulatory requirements since the global financial crisis. The indirect impact of some of these measures is becoming apparent.
For instance, new capital rules have seen banks retreat from certain risk-taking activities. That has resulted in sharply reduced levels of liquidity in some markets, particularly in certain areas of fixed income, such as high-yield debt.
This, potentially, makes it appreciably riskier to invest in these asset classes than was previously the case.
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