UK - Fund managers have warned schemes to brace themselves for further losses in their equity portfolios one year on from the September 11 attacks.
The firms claim that while the impact of the terrorist attacks has faded, they have left markets vulnerable to further falls – particularly when combined with accounting scandals and fears about the global economy.
Gartmore Investment Management market economist Jamie Lewin described the terrorist attacks as the “first punch” in a series of events that have decimated markets. He said that taken together, they had increased the “perceived risk” of investing in equities.
Lewin said: “The effect of September 11 has faded now, and has been replaced by concerns about where we’re going in terms of economic activity.
“Sentiment is quite poor, confidence is low and if we did get another shock on the magnitude of September 11, the markets would take it very poorly.”
State Street Global Advisors chief investment officer Alan Brown agreed, but warned schemes to expect further losses.
“The US is dragging everybody down. UK equities are at fair value, but we are dancing to the American tune,” he said.
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