Put event risk at core of portfolio strategies, Eastspring tells investors

SINGAPORE (May 31): Liquidity is a double-edged sword, according to Virginie Maisonneuve, chief investment officer (CIO) of Eastspring Investments, a member of Prudential (UK).

While the liquidity environment created by regulators and central banks to-date has been supportive of capital markets and provides a “tame” backdrop to the global investment landscape, Maisonneuve warns of heightened risk of tail events – infrequently occurring events that bring a large negative impact on portfolio returns.

Investors should therefore put event risk at the core of their portfolio strategies mindset and construction, advises the CIO in a report issued on Wednesday.

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