Russell Investment Group’s quarterly survey of investment managers reveals a general agreement that the current economic environment is relatively benign – and bullish overall – but they seem to have two very different, if not competing hypotheses as to how changes in the economy could push the markets to stumble. Inflation (22%) was the most cited threat over the next 12 months, but geopolitical instability (20%) and a softening real estate market (15%) weren’t far behind.
However, focusing on the period after the late February sell-off, 20% of managers pointed to a softening real estate market as the largest risk in equity performance over the next 12 months, versus just 8% previously.