Mumbai: A section of retail and institutional investors have grown anxious about the state of global finance with some of them expecting another global financial crisis in the next few years.
According to a study conducted by CFA Institute, the global association of investment management professionals, about one-third of investors (33 per cent of retail investors and 29 per cent of institutional investors) feel that another financial crisis is likely within the next three years.
Geographically, concerns are higher among retail investors in India (59 per cent say a crisis is very or extremely likely) and France (46 per cent), while the United Kingdom is at the other end of the spectrum at only 19 per cent. However, the survey also revealed that about half of them lack confidence in their investment firm’s ability to manage through a crisis. In the face of such uncertainty, a third of retail and institutional investors indicated they would reallocate their portfolios to less risky financial products and would focus more on risk management than returns in the event of a crisis.
“Investors are remaining loyal to their investment managers but only to a certain point. Retail investors can and will jump ship if they are not satisfied. Nearly a third of investors have changed firms in the past,” said Vidhu Shekhar, country head, India, CFA Institute. According analysts, the global economy is at the risk of crisis, with no growth driver in sight as all emerging markets, including China, is slowing down. The developed markets like European Union and Japan on the verge of recession.
Concerns of global slowdown have forced the US Federal Reserve to pause on its planned interest rates, which it began after years of near zero interest rate regime.
