Mundy: Investors are underestimating equity market risk

Investors are too fixated on tapering in the US and are leaving themselves overexposed to risks across equity markets, according to Investec's Alastair Mundy.

Mundy, manager of the £2.8bn Investec Cautious Managed fund, said investors are mistakenly remaining solely focused on the Federal Reserve and its tapering of its quantitative easing programme. "Investors know that there are risks, but they are underestimating the spread of potential risks and overestimating their ability to react to potential risk events," he said. "The markets are myopic and focused on tapering, which means they are not really prepared for any other shocks which could come from Chinese economic growth disappointment, a crisis in the eurozone, social unrest in emergi...