How can we explain the low volatility phenomenon?

Davan Byrne, fund manager at Davy Asset Management, outlines the factors he believes are contributing to the lowest market volatility levels in two decades.

Following Emmanuel Macron's victory in the French presidential election, volatility has fallen to the lowest levels witnessed in more than two decades. In fact, since the inception of the VIX index, or "fear gauge", (a measure that tracks traders' expectations of volatility on the S&P 500 for the coming 30 days), it has only closed lower than the recent reading of 9.77 on three occasions in its history. Highly leveraged investors face tipping point despite low market volatility The compression of volatility to current levels seems extreme, but follows a broader pattern that has see...