6 X-Factor Risks Keeping Fund Managers, Investors Up at Night

Global fund managers responding to a monthly Bank of America Merrill Lynch survey identify and rank risks that could cause an abrupt and abnormal drop in global markets. Britain’s possible exit from the European Union tops the list for May. Second, an ongoing concern is the risk of devaluation and defaults in China. Another ongoing concern is quantitative failure, “that trillions of dollars' worth of money printing in the US since 2010, combined with money printing in Europe, the UK and Japan, will at some point come back to bite the markets,” writes stockbroker Marcus Padley for the Sydney Morning Herald. “At this point the price looks like it's being paid gradually through lower/no/negative interest rates, which will manifest itself through lower asset price growth (subdued equity markets) and lower returns on assets (savers/retirees punished).” The list ends with the US election outcome in November, the possibility of US stagflation as well geopolitical risks, including terrorism and conflicts, anywhere in the world. – YaleGlobal