How to Manage Election Risk in Your Portfolio

Many investors will not be able to avoid the temptation to position in favour of an expected result. However, as was witnessed last year, this is a dangerous game to play 

Nordea 6 June, 2017 | 2:50PM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Asbjørn Trolle Hansen, manager of the Nordea 1 - GBP Diversified Return Fund questions whether multi-asset funds will learn from macro call flaws.

Macro event risk is always evident in markets. We have witnessed some notable occurrences over the past year, with the unexpected Brexit victory in the UK and Donald Trump’s startling win in the US presidential election.

Although these moments can have significant near-term impacts on markets, it is an extremely risky strategy to try and position a portfolio in anticipation of any single scenario. Making major asset allocation decisions based on macro calls of well analysed events has repeatedly proven to be a difficult investment strategy.

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About Author

Nordea  Nordea is a financial services group in the Nordic and Baltic region. Nordea offers online banking and insurance as well as information to investors. 

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