According to Bank of America Merrill Lynch (BofAML) survey in November, investors are most worried over eight tail risks, which they believe could heavily impact the portfolios. Only three of these risks were previously considered and five of them didn’t even worry the managers last month. The biggest one is that stagflation risks that could crash the bond market, considered by 23 percent of the fund managers in the survey. The second most worrying in the list is the risks from EU disintegration and banks default, however, in October survey almost 29 percent of the fund managers were worried about the issue. Surprisingly the fund managers don’t seem to be considering the US election outcome as of the tail risks. Other risks that are being considered are China FX devaluation, Tapering of QE by ECB and BoJ, Hard Brexit, US debt ceiling impasse, and OPEC discord. The survey was carried out on 177 global fund managers with $456 billion of funds under management. The survey was carried out after the US election.
The survey clearly shows that the fund managers are worried on inflation and the pessimism on the euro, sterling, and the yuan has gone deeper.


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