One of the key reasons which makes multi-asset investing attractive are the generally low yields. As a result of the global financial crisis, central banks around the world have lowered their key interest rates and engaged in unconventional easing measures. In this environment, many investors have put on some sort of a “liquidity trade” that tries to exploit the impact that abundant liquidity will have on future asset class returns.

The California Public Employees' Retirement System (CalPERS) today adopted a funding risk mitigation policy that will incrementally lower the discount rate in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers.

The risk concentration index (RCI) for a diversified portfolio had been on a downtrend since the start of 2014. The latest risk aversion spell has brought this to an end. This index, which measures the diversity of risk sources, peaked when markets were mainly guided by the perception of the Chinese risk and by the re-emergence of a systematic risk.

According to Tim Stevenson, Head of Europe Equity at Henderson Global Investors, with a clear increase in nervousness in recent months – especially August and September – it is perhaps time to ask “is that it in Europe”?

A rare market shakeout in which all major asset classes fell over the past six months is not the ‘new normal', says Lukas Daalder, Chief Investment Officer for Robeco Investment Solutions.