Tapan Datta


“Across the spectrum there is less tolerance and less of an ability to withstand sustained market volatility than there ought to be.” Tapan Datta, Aon


Portfolio Institutional: Is volatility on the way as many commentators predict that it is? Pete Drewienkiewicz: We have had a reasonably smooth ride and therefore it is sensible to predict that we will have more volatile times in the future. Do I have any sense of when that might come or what will cause it? Making predictions like that would be like throwing darts at a dartboard. We should take into account that the past 10 years have been abnormal. Therefore, if there is a concern it is complacency. The central bank activity that came into support the markets has almost conditioned people to invest in a certain way. Tapan Datta: We are likely to see volatility at higher underlying levels, but today’s levels are nothing to get over-excited about. Markets have been calm this year. That may be due to central banks providing reassurance to markets, but we would expect, on an under- lying basis, that volatility is likely to move up in the next few years. Femi Bart-Williams: If you plotted the “spike” volatility that we have seen over the past 12 months on a long-term chart you would barely see it. There is an argument that such a low volatility environment cannot continue. So preparing for the even- tual increase in volatility will be key.


6 April 2019 portfolio institutional roundtable: Managing volatility


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