Alex Borer

“Risk appetite among investors has continuously increased over the last couple of months alongside rising markets. In the meantime, a vast majority of asset allocators hold an overweight position in equities, which has not been the case for three years. Low implied volatility serves as another warning signal for equities. We conclude, that the short-term risk exceeds the return potential. We therefore reduce equity exposure by 6 per cent (emerging markets, Asia Pacific, global) and commodities by 2 per cent (futures and goldmines) and keep the proceeds in cash.”