Tail Risk Report: April 2018 - Not an optimistic future, but bright spots are identifiable



Janus Henderson’s US-based Multi-Asset Solutions Team present their latest tail risk report, using options market prices to infer expected tail gains and losses for each asset class. The options-implied signals indicate that while all asset classes may appear unattractive, some bright areas remain.

Key Takeaways

  • A catalyst that could pressure all asset classes is an inflation pressured global rise in real rates, which could push central banks into removing monetary stimulus sooner than the markets expect.
  • Within the bond and equity market environments, we see the US as most attractive, due respectively to higher relative real rates versus other regions and Washington’s stimulative fiscal policy.
  • In bond markets, those regions where real rates are lowest, such as Europe and Japan, appear most susceptible to a sell-off.

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These are the managers' views at the time of writing. References made to sectors or asset classes do not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase them.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

The information in this article does not qualify as an investment recommendation.

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