How asset allocators can navigate the market's bumpy grind

Markets will grind higher, but the road will be a bumpy one, and risk trades still have their place explains Santander Asset Management's multi-asset chief Toby Vaughan.

Crowded trades Broad market returns for 2014 and low implied volatility levels suggest a fairly calm period, but the reality is that markets have been swinging aggressively month on month. Sharp rotations have occurred in equities, exposing how clustered active managers have been in crowded trades. In recent years, we have been used to rising asset prices with low volatility, and we need to adapt portfolio strategy to a different environment. We expect further gains, but for it to be a bumpy grind higher - more stressful for those obsessed with short-term investing. Despite the ...