Focus on re-regulation is prompting risk aversion

THE US

Volatility has returned to markets, driven by events within the US and from abroad.

The heightened focus on re-regulating the financial system has prompted many investors to become more risk averse. This, in addition to sovereign debt issues in Greece and other eurozone countries and the Gulf of Mexico oil crisis, has put tremendous pressure on the US equity market, with the decline from the high points reached in April now exceeding 10%. Our portfolios are well positioned for a market being driven by fundamentals. However, the main drivers appear to be macro concerns and risk aversion. This environment has proved challenging and difficult for value investors, but we re...