Andrew Morris: Risk and return have been distorted

Now entering ‘normalisation’ cycle

clock • 4 min read

Historical risk and return norms have been completely cast aside over the last decade, writes Andrew Morris, meaning advisers should now seek to manage client expectations with ongoing dialogue

Last month, we discussed some research that indicated daily rebalancing delivered the best performance outcome for risk-targeted solutions. The results also threw up something else very interesting, however - namely how do we define risk and return? As an example, arguably the leading driver of investment returns since the financial crisis has been rock-bottom interest rates. Globally, central banks sought to use monetary stimulus to pump money into the system, attempting to alleviate the economic distress caused by the credit crunch, which raises the question - does ‘safe' then mean ‘sa...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Advisers notice growing client demand for bespoke investments

Advisers notice growing client demand for bespoke investments

Want access to ETFs, investment trusts, equities, bonds and AIM shares

Isabel Baxter
clock 17 April 2025 • 2 min read
FCA outlines final CCI ruling timeline as it brings out second consultation

FCA outlines final CCI ruling timeline as it brings out second consultation

'Detailed engagement' to continue

Eve Maddock-Jones
clock 16 April 2025 • 3 min read
Talking with… Rathbones Asset Management's James Thomson

Talking with… Rathbones Asset Management's James Thomson

The series continues as Richard Romer-Lee chats to James Thomson

Richard Romer-Lee
clock 14 April 2025 • 4 min read