Newton's Stewart explains 'very cautious' stance on Real Return fund

China a big risk

Iain Stewart, manager of the £10.2bn Real Return fund at Newton Investment Management, has highlighted a number of global risks to returns including the impact of "unorthodox" central bank policies, burgeoning debt levels and systemic risks from China.

Speaking at a recent Morningstar Investment Conference, Stewart said central bank monetary policies had left investors conditioned to receive support, which in turn encouraged them to take more risk and apply greater leverage. He said: "The feeling is central banks have [investors'] backs and will not let asset prices fall. The problem with inflating asset prices and not having an effect on economic activity is the gap between price expectations and reality, in terms of profits, begins to grow." Managers warn unwinding European QE could burst 'the mother of all bubbles' In parti...