In part two of this video interview, Bart van de Ven of Belgian wealth manager Accuro explains why he doesn’t like absolute return funds and why he prefers to keep some cash on the sidelines instead.
With volatile market
conditions prevailing, many
investors are turning to cash
as a risk-reducing measure.
But are they really doing
themselves a favour?
Amid a violent market correction reminiscent of the 2008 global meltdown and unusually heightened volatility, European investors have chosen to play it safe. Money-market funds were their preferred choice in August.
Investors around the world are increasing their cash holdings as the economic slowdown in China threatens to drag the world economy down. According to data from Lipper published today, investors poured in a net $77.7bn (€70.5bn) into money market funds in July. This is more than half the total amount flowing into cash funds in the previous nine months.
Turbulence in bond markets has left bond investors nervous and cash piles high but while more movement is expected, certainty on a few issues could see investors moving back into the market during the second half of the year.
With the traditional summer volatility set to be followed by a US interest rate hike, some managers are holding their highest-ever cash weightings – but is this the right course of action?
Eddy Vanwittembergh, a fund-of-funds manager at Merit Capital, tells EIE’s Tjibbe Hoekstra how he uses cash as an investment instrument, and why he currently prefers European high yield bonds over their US equivalents.