Three by three: A trio of trios of key risks now facing investors

Market, macro and portfolio construction

clock • 6 min read

Seema Shah, Bob Baur and Todd Jablonski pinpoint what they see as the three greatest risks now facing investors in relation to, respectively, markets, the macroeconomy and portfolio construction

Seema Shah: Three biggest market risks * Widening credit spreads: Over the last decade, record-low interest rates and markets awash with liquidity led to a debt binge. BBB-rated corporate bonds - those one notch above high-yield - now account for around half of the investment grade universe in the US and Europe. Slowing growth and rising interest rates imply weaker profit growth, and corporates will face challenges improving their balance sheets after this significant increase in debt. If the US Federal Reserve restarted its rate-hiking cycle and their balance sheet reduction continued...

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