The destruction of risk free returns thanks to low interest rates means investors have to understand the risks inherent in chasing gains from assets like shares. James Norrington talks to Graham Harrison, managing director of Asset Risk Consultants (ARC) about the challenges facing portfolio managers.
ARC runs the Private Client Index series, a selection of dynamic risk-weighted benchmarks for the asset management industry, based on over 250,000 contributing portfolios from 108 asset management firms worldwide.
There is an education gap between investors' expectations of the risk they must take to achieve inflation-beating returns and the reality of potential temporary falls in portfolio values. We discuss this conundrum on the podcast and to help investors understand how to manage their long-term strategy, Investors' Chronicle has also created a series of model asset allocations.