Eight years after the collapse of Lehman Brothers' triggered the global financial collapse, fund managers reveal the biggest lessons learned and those which remain on the horizon and are continuing to threaten the asset management industry.
Cyrique Bourbon, portfolio manager, Morningstar Investment Management Europe
No scarring
One would think investors must still be scarred by the 2008 crisis, however we see little evidence of this. Despite the fear-mongering and economic inertia, the facts show that most major markets have enjoyed a stellar ride to record-highs as little has changed from a psychological perspective.
Just as investors' hunger for yield led them to the subprime crisis in the 2000s, investors continue to chase yield and short-term returns at any costs.
We find ourselves in an unprecedented world of high debt, low to negative interest rates and easy monetary policy - all of which continues to distort asset prices globally. Granted, the banking system has de-levered since 2008, however banks remain at risk of another liquidity or financial market crisis.
The best (and worst) performing funds since Lehmans
Looking forward, this creates a very tricky environment for multi-asset investors as there are few places to hide. The biggest risk for investors is overpaying for these assets and we continue to see the long-term expected returns for equities and bonds diminishing.
As disciplined investors that are focused on a long-term valuation-driven process, this has led us to increasingly focus on pockets of value in unloved markets as well as increasing cash levels in portfolios.
