BNP Paribas multi-asset team: How we can capitalise on future 'flash crashes'

Further volatility expected

The managers of BNP Paribas Investment Partners' multi-asset funds are anticipating increasing cash levels to their highest for 10 years, as they forecast more "flash crashes" in the future.

Colin Graham (pictured), chief investment officer of the firm's multi-asset solutions business, said the view was based on the volatility outlook. Cash levels are currently at 3%, a higher rate than usual, but Graham thinks they could reach up to 10%-15% in the future. He said: "We think volatility will rise and there will be more regular flash crashes. But this will provide us with an opportunity to put money to work, so we are holding higher levels of cash than we have for the last 10 years in order to take advantage of these opportunities. "We expect cash levels to rise and ...