View the article online at http://citywire.co.uk/money/article/a661596
‘Expect much more volatility in Europe', says PIMCO’s El-Erian
Investors should expect more volatility spurred by Italy's election results, said bond fund manager Mohamed El Erian.
Investors should prepare for 'much more volatility', the chief of the world's largest bond fund manager has warned after a deadlock in the Italian elections renewed concerns about the stability of the eurozone.
'Expect much more volatility. You can expect to see much more in terms of what we've seen in Italy over the past couple of days,' said bond fund manager and market commentator Mohamed El-Erian, chief executive of PIMCO and manager of the mixed asset PIMCO GIS Global Advantage Real Return fund.
'The important lesson from Italy is that the wave of popular rejection that is going through Europe is in evidence,' he added in comments at the Institutional Money conference in Frankfurt.
Equity markets sold off sharply on Tuesday following the news which saw investors flock into perceived safe haven assets such as German government bonds.
El-Erian cited political risk as the biggest factor facing investors and said his team at PIMCO were currently reducing risk across their portfolios.
'We are gradually reducing credit and equity risk. We are also buying real assets because we expect inflation to hit in at least five years,' said El-Erian.
The investor added that he expects the US Federal Reserve to continue on a path of loose monetary policy, countering market concerns that the market-supporting stimulus could end sooner than previously expected.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the funds
Look up the fund managers
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.