Inflation has become the number one risk factor
Inflation has become the number one risk factor for fund managers' 37% and has overtaken covid-19.. That one topped the list since February 2020 and this month drops to third place; just behind the possibility of a "taper tantrum" in the bond market, according to a survey conducted by Bank of America. In fact, 93% of investors think the risk factor indicator will rise over the next 12 months. That is up 7% month-on-month, an all-time high.
The European Central Bank (ECB) expects the inflation rate to stand at 1.51P3T in 2021.The US recorded a rate of 1.3% in February, compared to the 1% it forecast last year. While these levels do not scare respondents, 43% believes it would be critical if this were to reach 2%; being the tightening level for 10-year U.S. Treasuries, it could cause a 10% correction in values.
To take into account the risk factor
Likewise, 48% of managers surveyed believe the economic recovery will be in a 'V' shapeThe reason why investor sentiment appears bullish, adding to the feeling of 89% of respondents. The former say global earnings are set to rise and 91% expect a stronger economy.
28% of survey participants are bullish on commodities, a level not reached since February 2011, when a barrel of Brent crude was trading above $100.
In terms of the most active investment areas, long-term technology ranks firstThe second most popular investment strategy is bitcoin, chosen by 34% of managers, followed by bitcoin, chosen by 24%, and investment with sustainable, social and good governance criteria, chosen by 15%.
