Data Centre: How investors take unnecessary risks

Institutional investors have gradually been shifting the level of risk they are prepared to take when it comes to their investments, according to a major global survey. 

Northern Trust Asset Management released the survey in November that was based upon 64 asset owner respondents from all over the world, including Asia Pacific, with over $200 billion in assets under management. The study revealed that many of these institutional investors had allowed certain types of investment risk in their portfolios expand, but that not all of these types of exposure offered them the opportunity to gain more returns.

Some, the asset manager's survey reported, are "uncompensated risks", or an exposure by the investor to market movements that does not yield any commensurate potential improvement in return. In other words, they are risks that the asset owners would do well to minimise.  

The survey also considered how double exposure to some portfolio risks and and dangers of over-diversification could also stymie investment portfolio returns. 

For more information on the survey's findings, please click this link.