HY Spread, това ли те притеснява най-много?
Some fund investors may overestimate the liquidity of the assets held by the funds in which they invest, and may not expect the high cost or difficulty associated with funds exiting their positions or rebalancing their portfolios in a stressed environment. As a result of unanticipated large losses in such a situation, investors may make significant redemptions from underperforming funds to minimise further negative returns. Funds’ sale of portfolio assets required to meet these redemptions could result in greater market volatility with the potential to result in negative spillovers (e.g. increased redemptions and asset sales). During prolonged periods in which highly accommodative monetary policies affect asset valuations, investors may reach for yield and under-price credit and liquidity risks. This could interact with a decline in secondary market liquidity, so that a shift in market expectations could produce repricing of assets, liquidity strains in certain markets, and the potential for contagion across asset classes.
Although historical evidence suggests that non-money-market open-ended funds have not generally created global financial stability concerns in recent periods of stress and heightened volatility,27 developments in the sector and the increasing holdings of fixed income assets by investment funds suggest that risks may have increased in recent years. In response to investor demand, some open-ended funds have increased their exposures to a broader range of asset classes, including some that are less actively traded. They have also increased investment in asset classes that, while liquid under current market conditions, may become less liquid as risk perceptions and underlying credit conditions change. These developments may amplify fragilities that, if left unaddressed, may in turn amplify market stress as funds sell across asset classes to meet unanticipated large redemptions. To this end, there is some evidence that phenomena such as investor herding and momentum trading can contribute to the amplification effects.28 It is important to address these vulnerabilities before they manifest themselves as realised threats to financial stability.
Some fund investors may overestimate the liquidity of the assets held by the funds in which they invest, and may not expect the high cost or difficulty associated with funds exiting their positions or rebalancing their portfolios in a stressed environment. As a result of unanticipated large losses in such a situation, investors may make significant redemptions from underperforming funds to minimise further negative returns. Funds’ sale of portfolio assets required to meet these redemptions could result in greater market volatility with the potential to result in negative spillovers (e.g. increased redemptions and asset sales). During prolonged periods in which highly accommodative monetary policies affect asset valuations, investors may reach for yield and under-price credit and liquidity risks. This could interact with a decline in secondary market liquidity, so that a shift in market expectations could produce repricing of assets, liquidity strains in certain markets, and the potential for contagion across asset classes.
Although historical evidence suggests that non-money-market open-ended funds have not generally created global financial stability concerns in recent periods of stress and heightened volatility,27 developments in the sector and the increasing holdings of fixed income assets by investment funds suggest that risks may have increased in recent years. In response to investor demand, some open-ended funds have increased their exposures to a broader range of asset classes, including some that are less actively traded. They have also increased investment in asset classes that, while liquid under current market conditions, may become less liquid as risk perceptions and underlying credit conditions change. These developments may amplify fragilities that, if left unaddressed, may in turn amplify market stress as funds sell across asset classes to meet unanticipated large redemptions. To this end, there is some evidence that phenomena such as investor herding and momentum trading can contribute to the amplification effects.28 It is important to address these vulnerabilities before they manifest themselves as realised threats to financial stability.
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