Northern Trust survey: Inflation fears spur caution

By Mary Ellen Podmolik
Posted April 13 at 10:07 a.m.

Fears of inflation and a spike in oil prices are causing institutional investment managers to become more risk-averse, according to a survey of institutional managers by Northern Trust Global Advisors.

The firm found that almost 70 percent of the 88 professionals surveyed believe the risk of inflation will increase over the next six months and 62 percent expect market volatility. Also, 42 percent of survey respondents predict that home prices will decline over the next six month.

As a result, 36 percent of managers said they are more risk-averse compared to 2010’s final quarter, when just 20 percent were. Worries about inflation led 26 percent of the managers to boost the commodities’ holdings in their portfolios.

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